Figure 26-2
-Refer to Figure 26-2. In the figure above, the movement from point A to point B in the money market would be caused by
A) an increase in the price level.
B) a decrease in real GDP.
C) an open market sale of Treasury securities by the Federal Reserve.
D) a decrease in the required reserve ratio by the Federal Reserve.

Question

Figure 26-2 
-Refer to Figure 26-2. In the figure above, the movement from point A to point B in the money market would be caused by
A) an increase in the price level. 
B) a decrease in real GDP. 
C) an open market sale of Treasury securities by the Federal Reserve. 
D) a decrease in the required reserve ratio by the Federal Reserve.

Quizplus · Accepted Answer

An open market sale of Treasury securities by the Federal Reserve would decrease the money supply, causing the interest rate to rise, which is represented by a movement from point A to point B in the money market.

Figure 26-2 -Refer to Figure 26-2. in the Figure Above, the Movement