(Figure: Money Supply and Demand) the Money Demand Curve (MD)

Multiple Choice

(Figure: Money Supply and Demand) The money demand curve (MD) is downward sloping, reflecting the opportunity cost of holding liquid forms of money such as cash. The money supply curve (MS) is determined by _____. Point (P) is the _____.

A) the Federal Reserve; maximum interest rate
B) the Mortgage Banks; maximum interest rate
C) the Federal Reserve; equilibrium interest rate
D) the Mortgage Banks; equilibrium interest rate