Exhibit 14-1

-Refer to the graph in the exhibit.Suppose the interest rate increases.What will this move cause?
A) a move from B to A
B) a move from A to B
C) a move from DM to DM'
D) a move from DM to DM*

Question

Exhibit 14-1
 
-Refer to the graph in the exhibit.Suppose the interest rate increases.What will this move cause?  
A) a move from B to A 
B) a move from A to B 
C) a move from DM to DM' 
D) a move from DM to DM*

Quizplus · Accepted Answer

An increase in the interest rate typically causes a movement along the demand curve for money, from a higher quantity of money demanded (B) to a lower quantity (A), due to the higher cost of borrowing.

Exhibit 14-1 -Refer to the Graph in the Exhibit.Suppose the Interest Rate