Nominal interest rate (percent per year) 8 MS 4 MD .3 .6 .9 1.2 1.5 Money (trillions of dollars) In the above figure, MS = money supply and MD = money demand (L). According to the figure, if the interest rate is 3 percent per year, then the quantity of money demanded is O a. greater than the quantity of money supplied, and the interest rate will change. O b. less than the quantity of money supplied, and the demand for money curve will shift. O C. greater than the quantity of money supplied, and the supply of money curve will shift. O d. less than the quantity of money supplied, and the interest rate will change. е. greater than the quantity of money supplied, and the demand for money curve will shift. 2.
Nominal interest rate (percent per year) 8 MS 4 MD .3 .6 .9 1.2 1.5 Money (trillions of dollars) In the above figure, MS = money supply and MD = money demand (L). According to the figure, if the interest rate is 3 percent per year, then the quantity of money demanded is O a. greater than the quantity of money supplied, and the interest rate will change. O b. less than the quantity of money supplied, and the demand for money curve will shift. O C. greater than the quantity of money supplied, and the supply of money curve will shift. O d. less than the quantity of money supplied, and the interest rate will change. е. greater than the quantity of money supplied, and the demand for money curve will shift. 2.
Chapter14: Money And The Economy
Section: Chapter Questions
Problem 12QP
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