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Figure: A Money Market
-(Figure: A Money Market) Look at the figure A Money Market. If the interest rate is r₃, the interest rate will _____ because there is a _____ of money in the market.

Question

Use the following to answer questions:
Figure: A Money Market

-(Figure: A Money Market) Look at the figure A Money Market. If the interest rate is r₃, the interest rate will _____ because there is a _____ of money in the market.

Quizplus · Accepted Answer

According to the figure, when there is a surplus of money in the market, the interest rate falls. Therefore, if the interest rate is r₃, the interest rate will fall because there is a surplus of money in the market.

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