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If There Is Excess Demand in the Money Market

Question 13

Multiple Choice

If there is excess demand in the money market,


A) the supply of money will increase to meet the demand at the current short-term nominal interest rate.
B) the short-term nominal interest rate will decrease until the excess demand disappears.
C) the short-term nominal interest rate will increase until the excess demand disappears.
D) the money demand curve will shift to the left until the excess demand disappears.

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