FIGURE 27-2
-Refer to Figure 27-2. Suppose the market interest rate is i2. The situation in this market is as follows:
A) firms and households are attempting to increase their money holdings by selling bonds.
B) firms and households are attempting to decrease their money holdings by selling bonds.
C) firms and households are attempting to increase their money holdings by buying bonds.
D) firms and households are attempting to decrease their money holdings by buying bonds.
E) the market is in equilibrium and no change will occur.
Correct Answer:
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