Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 13

Suppose the supply of money declines to $100 billion. The equilibrium interest rate would:
A) fall, the amount of money demanded for transactions would rise, and the amount of money demanded as an asset would decline.
B) rise, and the amounts of money demanded both for transactions and as an asset would fall.
C) fall, and the amounts of money demanded both for transactions and as an asset would increase.
D) rise, the amount of money demanded for transactions would be unchanged, and the amount of money demanded as an asset would decline.