Exhibit 20-2  Money Market Demand and Supply Curves as Shown

Multiple Choice

Exhibit 20-2  Money market demand and supply curves As shown in Exhibit 20-2, assume the money supply curve shifts rightward from MS₁ to MS₂ and the economy is operating along the intermediate segment of the aggregate supply curve. The result will be a:

A) higher interest rate and no effect on real GDP or the price level.
B) lower investment, lower real GDP, and lower price level.
C) higher investment, higher real GDP, and higher price level.
D) higher investment, lower real GDP, and lower price level.