-In the above figure, if the interest rate is 2 percent per year, the quantity of money demanded is
A) less than the quantity of money supplied and the interest rate will change.
B) greater than the quantity of money supplied and the interest rate will change.
C) less than the quantity of money supplied and the demand for money curve will shift.
D) greater than the quantity of money supplied and the demand for money curve will shift.
E) greater than the quantity of money supplied and the supply of money curve will shift.

Question

-In the above figure, if the interest rate is 2 percent per year, the quantity of money demanded is
A) less than the quantity of money supplied and the interest rate will change. 
B) greater than the quantity of money supplied and the interest rate will change. 
C) less than the quantity of money supplied and the demand for money curve will shift. 
D) greater than the quantity of money supplied and the demand for money curve will shift. 
E) greater than the quantity of money supplied and the supply of money curve will shift.

Quizplus · Accepted Answer

When the interest rate is 2 percent, the quantity of money demanded is greater than the quantity of money supplied, leading to upward pressure on the interest rate.

-In the Above Figure, If the Interest Rate Is 2