Refer to the Above Market for Money Diagram

Multiple Choice

Refer to the above market for money diagram.If the interest rate was at 8 percent, people would:

A) sell bonds, which would cause bond prices to fall and the interest rate to fall.
B) buy bonds, which would cause bond prices to rise and the interest rate to fall.
C) have insufficient liquidity, which would cause them to reduce their spending on consumer goods.
D) buy bonds, which would cause bond prices to fall and the interest rate to rise.