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Answer the Question on the Basis of the Information in the Following

Question 153

Multiple Choice

Answer the question on the basis of the information in the following table. Money Supply$400400400400400 Money  Demanc $600500400300200 Interest Rate 2%3456Investment (at Interest Rate Shown) $700600500300200\begin{array}{c}\begin{array}{c}\\\text {Money}\\\underline{\text { Supply}}\\ \$ 400 \\400\\400\\400\\400\end{array}\begin{array}{c}\\\text { Money }\\\underline{\text { Demanc }} \\ \$ 600 \\500 \\400 \\300 \\200\end{array}\begin{array}{c}\\\text { Interest}\\\underline{\text { Rate }} \\ 2 \% \\3 \\4 \\5 \\6\end{array}\begin{array}{c}\text {Investment }\\\text {(at Interest}\\\underline{\text { Rate Shown) }}\\\$ 700 \\600 \\500 \\300 \\200\end{array}\end{array}
Refer to the table.An interest rate of 2 percent is not sustainable because:


A) the demand for bonds in the bond market will fall and the interest rate will fall.
B) the demand for bonds in the bond market will rise and the interest rate will fall.
C) the supply of bonds in the bond market will decline and the interest rate will rise.
D) the supply of bonds in the bond market will rise and the interest rate will rise.

Correct Answer:

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