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If There Is Excess Supply in the Money Market

Question 14

Multiple Choice

If there is excess supply in the money market,


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

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