Narrbegin Exhibit 15.1 Money market demand and supply curves
-Beginning from an equilibrium at E₁ in Exhibit 15.1, a decrease in the money supply from $150 billion to $100 billion causes people to:

Question

Narrbegin Exhibit 15.1 Money market demand and supply curves -Beginning from an equilibrium at E₁ in Exhibit 15.1, a decrease in the money supply from $150 billion to $100 billion causes people to:

Quizplus · Accepted Answer

When the money supply decreases, people will sell bonds to increase their holdings of money. This increase in the supply of bonds in the market drives the price of bonds down.