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If Households and Firms Find They Are Holding More Money

Question 87

Multiple Choice

If households and firms find they are holding more money than desired, they will


A) sell bonds, and the interest rate will rise.
B) sell bonds, and the interest rate will fall.
C) buy bonds, and the interest rate will rise.
D) buy bonds, and the interest rate will fall.
E) buy goods, and the price level will rise.

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