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

Question 421

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


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

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