In the Money Market, If the Interest Rate Exceeds the Equilibrium

Multiple Choice

In the money market, if the interest rate exceeds the equilibrium interest, there is a surplus of money. How is the surplus eliminated?

A) Banks will lend out the surplus, lowering interest rates.
B) The high interest rate increases the demand for money, eliminating the surplus.
C) People buy bonds to rid themselves of the surplus money, bidding up their price and pushing interest rates down.
D) The Federal Reserve will destroy currency, reducing the quantity of money.