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-In the Above Figure, Suppose the Economy Is Initially on the Demand

Question 65

Multiple Choice

-In the above figure, suppose the economy is initially on the demand for money curve MD<sub>1</sub>. What is the effect of a fall in the nominal interest rate? A) There would be a movement downward along the demand for money curve MD<sub>1</sub>. B) The demand for money curve would shift leftward to MD<sub>0</sub>. C) There would be a movement upward along the demand for money curve MD<sub>1</sub>. D) The demand for money curve would shift rightward to MD<sub>2</sub>.
-In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of a fall in the nominal interest rate?


A) There would be a movement downward along the demand for money curve MD1.
B) The demand for money curve would shift leftward to MD0.
C) There would be a movement upward along the demand for money curve MD1.
D) The demand for money curve would shift rightward to MD2.

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