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Exhibit 20-1  Money Market Demand and Supply Curves Starting from an Equilibrium

Question 220

Multiple Choice

Exhibit 20-1  Money market demand and supply curves Exhibit 20-1  Money market demand and supply curves Starting from an equilibrium at E<sub>1</sub> in Exhibit 20-1, a leftward shift of the money supply curve from MS<sub>1</sub> to MS<sub>2</sub> would cause an excess: A) demand for money, leading people to sell bonds. B) demand for money, leading people to buy bonds. C) supply of money, leading people to sell bonds. D) supply of money, leading people to buy bonds. Starting from an equilibrium at E1 in Exhibit 20-1, a leftward shift of the money supply curve from MS1 to MS2 would cause an excess:


A) demand for money, leading people to sell bonds.
B) demand for money, leading people to buy bonds.
C) supply of money, leading people to sell bonds.
D) supply of money, leading people to buy bonds.

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