Use the Following to Answer Questions

question 98

Multiple Choice

Use the following to answer questions:
Figure: A Money Market
-(Figure: A Money Market) Look at the figure A Money Market. Holding the money supply constant, which of the following might cause the equilibrium interest rate to decrease to r₁?

• A)The inflation rate rises to historically high levels.
• B)Higher payroll taxes cause employers to pay workers cash under the table.
• C)A recession decreases real GDP.
• D)There is a significant increase in the stock market.

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