Use the following to answer questions:
Figure: A Money Market
-(Figure: A Money Market) Refer to Figure: A Money Market. If the current interest rate is r₁, the interest rate will _____ because there is a _____ of money in the market.

Question

Use the following to answer questions:
Figure: A Money Market

-(Figure: A Money Market) Refer to Figure: A Money Market. If the current interest rate is r₁, the interest rate will _____ because there is a _____ of money in the market.

Quizplus · Accepted Answer

If the current interest rate is r1 and there is a shortage of money in the market, the interest rate will rise as people are willing to pay more to borrow money, driving the rate up.

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