If the Quantity of Money Demanded Is Less Than the Quantity

question 158

Multiple Choice

If the quantity of money demanded is less than the quantity supplied at a given interest rate,what will happen to restore the market to equilibrium?

• A) The public will try to buy bonds,the price of bonds will increase,and the interest rate will fall until the equilibrium is attained where the money demand and supply curves intersect.
• B) The public will try to sell bonds,the price of bonds will decrease,and the interest rate will rise until equilibrium is attained where the money demand and supply curves intersect.
• C) The public will try to sell bonds,the price of bonds will increase,and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect.
• D) The public will try to buy bonds,the price of bonds will increase,and the interest rate will rise until equilibrium is attained where the money demand and supply curves intersect.
• E) The public will try to buy bonds,the price of bonds will decrease,and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect.

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Definitions:

Coping

Efforts to master, reduce, or tolerate the demands created by stress.

Healthy Choices

Decisions made in daily life that contribute to good physical and mental health, such as eating nutritious foods and exercising.

Stammering Speech

A speech disorder characterized by involuntary repetitions and prolongations of sounds, syllables, words or phrases, and involuntary silent pauses or blocks in which the person who stammers is unable to produce sounds.

Behaviorism

A theoretical orientation based on the premise that scientific psychology should study observable behavior.