-Refer to the Graph Above to Answer This Question

question 114

Multiple Choice

-Refer to the graph above to answer this question.Why is an interest rate of r₁ untenable?

• A)Because people will buy bonds to obtain more money thereby causing the interest rate to increase.
• B)Because people will buy bonds to obtain more money thereby causing the interest rate to fall.
• C)Because people will sell bonds to obtain more money thereby causing the interest rate to fall.
• D)Because people will sell bonds to obtain more money thereby causing the interest rate to increase.
• E)Because people will buy bonds to get rid of their excess money balances thereby causing the interest rate to increase.

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Definitions:

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation, testing, or experimentation.

Informative

Providing useful or important information or details.

Assumptions

Statements or ideas accepted as true without proof, used as the basis for reasoning or argumentation.

Explanandum

The phenomenon or event that is to be explained, often used in the context of scientific inquiry.