-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess
A) demand for money and the interest rate will rise.
B) quantity of money and the interest rate will rise.
C) quantity of money and the interest rate will fall.
D) demand for money and the interest rate will fall.

Question

-In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess
A) demand for money and the interest rate will rise. 
B) quantity of money and the interest rate will rise. 
C) quantity of money and the interest rate will fall. 
D) demand for money and the interest rate will fall.

Quizplus · Accepted Answer

When there is an excess demand for money, people will sell bonds to obtain more money, causing bond prices to fall and interest rates to rise.

-In the Figure Above, If the Interest Rate Is 4