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Refer to the Graph Above, in Which Dt Is the Transactions

Question 5

Multiple Choice

  Refer to the graph above, in which D<sub>t</sub> is the transactions demand for money, D<sub>m</sub> is the total demand for money, and S<sub>m</sub> is the supply of money. The market is in equilibrium at the 6 percent rate of interest. If the money supply then decreases as shown, the transaction demand for money will change by: A)  $175 B)  $125 C)  $75 D)  $0 Refer to the graph above, in which Dt is the transactions demand for money, Dm is the total demand for money, and Sm is the supply of money. The market is in equilibrium at the 6 percent rate of interest. If the money supply then decreases as shown, the transaction demand for money will change by:


A) $175
B) $125
C) $75
D) $0

Correct Answer:

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