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-(Figure: A Money Market) Refer to Figure: A Money Market.If the interest rate is i₃,the interest rate will _____ because there is a _____ of money in the market.

Question

Use the following to answer questions:

-(Figure: A Money Market) Refer to Figure: A Money Market.If the interest rate is i₃,the interest rate will _____ because there is a _____ of money in the market.

Quizplus · Accepted Answer

According to the graph, when there is a surplus of money in the market, the demand for loanable funds decreases, which leads to a decrease in the interest rate. Therefore, if the interest rate is i₃, the interest rate will fall because there is a surplus of money in the market. The correct choice is A.

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