Figure 15-2
-Refer to Figure 15-2.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 Treasury securities by the Federal Reserve.
D)a decrease in the required reserve ratio by the Federal Reserve.

Question

Figure 15-2 
-Refer to Figure 15-2.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 Treasury securities by the Federal Reserve. 
D)a decrease in the required reserve ratio by the Federal Reserve.

Quizplus · Accepted Answer

An open market sale of Treasury securities by the Federal Reserve would decrease the reserves of banks, leading to a decrease in the supply of money in the economy. This would cause the equilibrium interest rate to increase and the quantity of money demanded to decrease, resulting in a movement from point A to point B in the money market. None of the other options listed would cause this movement.

Figure 15-2 -Refer to Figure 15-2.In the Figure Above,the Movement from Point