-In the above figure, if the interest rate is 2 per cent per year, the quantity of money demanded is
A) less than the quantity of money supplied, and the demand for money curve will shift.
B) greater than the quantity of money supplied, and the interest rate will change.
C) less than the quantity of money supplied, and the interest rate will change.
D) greater than the quantity of money supplied, and the demand for money curve will shift.
E) greater than the quantity of money supplied, and the supply of money curve will shift.

Question

-In the above figure, if the interest rate is 2 per cent per year, the quantity of money demanded is
A) less than the quantity of money supplied, and the demand for money curve will shift. 
B) greater than the quantity of money supplied, and the interest rate will change. 
C) less than the quantity of money supplied, and the interest rate will change. 
D) greater than the quantity of money supplied, and the demand for money curve will shift. 
E) greater than the quantity of money supplied, and the supply of money curve will shift.

Quizplus · Accepted Answer

If the interest rate is 2 percent per year and the quantity of money demanded is greater than the quantity of money supplied, the interest rate will adjust to restore equilibrium in the money market.

-In the Above Figure, If the Interest Rate Is 2