Exhibit 20-6  Money, Investment and Product Markets in Exhibit 20-6

Multiple Choice

Exhibit 20-6  Money, investment and product markets In Exhibit 20-6, a move from MS₁ to MS₂:

A) increases the money supply, causing the interest rate to rise from i₂ to i₁.
B) increases the money supply, causing the interest rate to fall from i₁ to i₂.
C) decreases the money supply, causing the interest rate to rise from i₂ to i₁.
D) decreases the money supply, causing the interest rate to fall from i₁ to i₂.
E) has no effect on the money supply or the interest rate.