Figure 26-3 -Refer to Figure 26-3. In the figure above, when the money supply shifts from MS₁ to MS₂, at the interest rate of 3 percent households and firms will A) buy Treasury bills. B) sell Treasury bills. C) neither buy nor sell Treasury bills. D) want to hold more money.

Question

Quizplus · Accepted Answer

When the money supply increases, the interest rate falls. At a lower interest rate, households and firms will want to hold more money, so they will buy Treasury bills.

Figure 26-3 -Refer to Figure 26-3. in the Figure Above, When the Above