Use the following to answer questions:
Figure: A Money Market 
-(Figure: A Money Market) Look at the figure A Money Market. If the current interest rate is r1, the interest rate will _____ because there is a _____ of money in the market.
Definitions:
Inflationary Premium
The additional interest rate or return that lenders demand to compensate for the decrease in purchasing power of money due to inflation.
Money Rate
It usually refers to the interest rate, which is the cost of borrowing money, often set by central banks to influence economic activity.
Real Rate
The interest rate adjusted for inflation, representing the true cost of borrowing or the true return on investment.
Inflationary Premium
The part of the nominal interest rate that represents compensation to the lender for the expected loss of purchasing power due to inflation.
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