Figure 15-1
-Refer to Figure 15-1. What is most likely to happen if the interest rate is equal to 4?
A) There is an excess demand for money, and the interest rate will fall.
B) There is an excess supply of money, and the interest rate will rise.
C) There is an excess demand for money, and the interest rate will rise.
D) There is an excess supply of money, and the interest rate will fall.

Question

Figure 15-1 
-Refer to Figure 15-1. What is most likely to happen if the interest rate is equal to 4?
A) There is an excess demand for money, and the interest rate will fall. 
B) There is an excess supply of money, and the interest rate will rise. 
C) There is an excess demand for money, and the interest rate will rise. 
D) There is an excess supply of money, and the interest rate will fall.

Quizplus · Accepted Answer

At an interest rate of 4, the quantity of money demanded is less than the quantity supplied, indicating an excess supply of money. This excess supply puts downward pressure on the interest rate, causing it to fall.

Figure 15-1 -Refer to Figure 15-1. What Is Most Likely to Happen