Figure 15-1

-Refer to the Figure 15-1.At an interest rate of 4 percent,how much is the excess money demand or supply?
A) There is an excess money demand equal to the distance between a and b.
B) There is an excess money demand equal to the distance between b and c.
C) There is an excess money supply equal to the distance between b and a.
D) There is an excess money supply equal to the distance between c and b.

Question

Figure 15-1
 
-Refer to the Figure 15-1.At an interest rate of 4 percent,how much is the excess money demand or supply?
A) There is an excess money demand equal to the distance between a and b. 
B) There is an excess money demand equal to the distance between b and c. 
C) There is an excess money supply equal to the distance between b and a. 
D) There is an excess money supply equal to the distance between c and b.

Quizplus · Accepted Answer

At an interest rate of 4 percent, there is an excess money supply equal to the distance between point b and point a. This is because the quantity of money supplied (MS) exceeds the quantity of money demanded (MD) at this interest rate.

Figure 15-1 -Refer to the Figure 15-1.At an Interest Rate of 4