Refer to the Information Provided in Figure 11

question 58

Multiple Choice

Refer to the information provided in Figure 11.5 below to answer the questions that follow. Figure 11.5
-Refer to Figure 11.5.If the money supply increases from to ,

• A)money demand must decrease for the money market to return to equilibrium.
• B)the interest rate will decrease to 4%.
• C)the interest rate will increase to 8%.
• D)the money market will return to equilibrium only if the money supply is increased to its original level.

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Definitions:

Periodic Payment

Payments made or received regularly over a specific period, often monthly or annually.

GIC

In Canada, a Guaranteed Investment Certificate is a type of investment that guarantees a fixed return rate over a certain period.

Compounded Annually

Interest on an investment calculated once a year, where each year's interest adds to the principal.

GIC

Guaranteed Investment Certificate, a Canadian investment that offers a guaranteed rate of return over a fixed period of time, usually with higher interest rates for longer terms.