Figure 11.7 Alt text for Figure 11.7: In figure 11.7, a graph shows movement in the money market.
Long description for Figure 11.7: The x-axis is labelled, quantity of money, M (billions of dollars), with value 500 marked.The y-axis is labelled, interest rate, i, with values 4 and 5% marked.3 lines are shown; MD1, MD2, and MS.Line MD1 begins in the top left corner and slopes down to the end of the x-axis.Line MD2 follows the same slope as line MD1, but is plotted to the right.Line MS is perpendicular to the x-axis, and begins from the value 500.Line MD1 meets line MS at point A (500, 4), a little more than half way along both lines.Line MD2 meets line MS at point B (500, 5%), approximately 3 quarters of the way along both lines.These points of intersection are connected to their respective coordinates on the y-axis using dotted lines.
-Refer to Figure 11.7.In the figure above, the movement from point A to point B in the money market would be caused by
A)an increase in the price level.
B)a decrease in real GDP.
C)an open market sale of Canada bonds by the Bank of Canada.
D)an increase in the desired reserve ratio by commercial banks.
E)the Bank of Canada making more loans to commercial banks.

Question

Figure 11.7  Alt text for Figure 11.7: In figure 11.7, a graph shows movement in the money market.
Long description for Figure 11.7: The x-axis is labelled, quantity of money, M (billions of dollars), with value 500 marked.The y-axis is labelled, interest rate, i, with values 4 and 5% marked.3 lines are shown; MD1, MD2, and MS.Line MD1 begins in the top left corner and slopes down to the end of the x-axis.Line MD2 follows the same slope as line MD1, but is plotted to the right.Line MS is perpendicular to the x-axis, and begins from the value 500.Line MD1 meets line MS at point A (500, 4), a little more than half way along both lines.Line MD2 meets line MS at point B (500, 5%), approximately 3 quarters of the way along both lines.These points of intersection are connected to their respective coordinates on the y-axis using dotted lines.
-Refer to Figure 11.7.In the figure above, the movement from point A to point B in the money market would be caused by
A)an increase in the price level. 
B)a decrease in real GDP. 
C)an open market sale of Canada bonds by the Bank of Canada. 
D)an increase in the desired reserve ratio by commercial banks. 
E)the Bank of Canada making more loans to commercial banks.

Quizplus · Accepted Answer

The Answer of Figure 11.7  Alt text for Figure 11.7: In figure 11.7, a graph shows movement in the money market.
Long description for Figure 11.7: The x-axis is labelled, quantity of money, M (billions of dollars), with value 500 marked.The y-axis is labelled, interest rate, i, with values 4 and 5% marked.3 lines are shown; MD1, MD2, and MS.Line MD1 begins in the top left corner and slopes down to the end of the x-axis.Line MD2 follows the same slope as line MD1, but is plotted to the right.Line MS is perpendicular to the x-axis, and begins from the value 500.Line MD1 meets line MS at point A (500, 4), a little more than half way along both lines.Line MD2 meets line MS at point B (500, 5%), approximately 3 quarters of the way along both lines.These points of intersection are connected to their respective coordinates on the y-axis using dotted lines.
-Refer to Figure 11.7.In the figure above, the movement from point A to point B in the money market would be caused by
A)an increase in the price level. 
B)a decrease in real GDP. 
C)an open market sale of Canada bonds by the Bank of Canada. 
D)an increase in the desired reserve ratio by commercial banks. 
E)the Bank of Canada making more loans to commercial banks.

Figure 117 Alt Text for Figure 11