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Exhibit: Market for Real Money Balances Based on the Graph

Question 21

Multiple Choice

Exhibit: Market for Real Money Balances Exhibit: Market for Real Money Balances Based on the graph, if the interest rate is r<sub>3</sub>, then people will _____ bonds, and the interest rate will _____. A) sell; rise B) sell; fall C) buy; rise D) buy; fall Based on the graph, if the interest rate is r3, then people will _____ bonds, and the interest rate will _____.


A) sell; rise
B) sell; fall
C) buy; rise
D) buy; fall

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