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Figure 21-4

Question 124

Multiple Choice

Figure 21-4. On the figure, MS represents money supply and MD represents money demand. Figure 21-4. On the figure, MS represents money supply and MD represents money demand. -Refer to Figure 21-4. Suppose the current equilibrium interest rate is r<sub>3</sub>. Which of the following events would cause the equilibrium interest rate to decrease? A) The Federal Reserve increases the money supply. B) Money demand decreases. C) The price level decreases. D) All of the above are correct.
-Refer to Figure 21-4. Suppose the current equilibrium interest rate is r3. Which of the following events would cause the equilibrium interest rate to decrease?


A) The Federal Reserve increases the money supply.
B) Money demand decreases.
C) The price level decreases.
D) All of the above are correct.

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