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Use the Following to Answer Questions

Question 7

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Use the following to answer questions :
Exhibit: Market for Real Money Balances Use the following to answer questions : Exhibit: Market for Real Money Balances -(Exhibit: Market for Real Money Balances) Based on the graph, if the interest rate is r<sub>3</sub>, then people will ______ bonds and the interest rate will ______. A) sell; rise B) sell; fall C) buy; rise D) buy; fall
-(Exhibit: Market for Real Money Balances) Based on the graph, if the interest rate is r3, then people will ______ bonds and the interest rate will ______.


A) sell; rise
B) sell; fall
C) buy; rise
D) buy; fall

Correct Answer:

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