Multiple Choice
For the following questions, consult the diagram below:
Figure 34-1
-Refer to Figure 34-1.Which of the following is correct?
A) If the interest rate is 4 percent, there is excess money demand, and the interest rate will fall.
B) If the interest rate is 3 percent, there is excess money supply, and the interest rate will rise.
C) If the interest rate is 4 percent, the demand for goods will rise when the money market is in its new equilibrium.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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