Figure 16-1 -Refer to Figure 16-1. Which of the Following Is Correct

Multiple Choice

Figure 16-1

-Refer to Figure 16-1. 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) Starting with an interest rate of 4 percent, the demand for goods and services will increase until the money market reaches a new equilibrium.
D) None of the above is correct.