-Refer to the Above Market for Money Diagram

question 213

Multiple Choice

-Refer to the above market for money diagram.Given D_m and S_m,an interest rate of i₃ is not sustainable because:

• A) the supply of bonds in the bond market will decline and the interest rate will rise.
• B) the supply of bonds in the bond market will increase and the interest rate will decline.
• C) the demand for bonds in the bond market will decline and the interest rate will rise.
• D) the demand for bonds in the bond market will rise and the interest rate will fall.

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