When households and firms sell financial assets, such as government securities, the
A) nominal interest rate falls.
B) market price of the securities increases.
C) nominal interest rate rises.
D) demand for money curve shifts leftward.
E) supply of money curve shifts leftward.

Question

Quizplus · Accepted Answer

When households and firms sell financial assets, the supply of these assets increases, leading to a decrease in their prices and an increase in the nominal interest rate.

When Households and Firms Sell Financial Assets, Such as Government