Refer to the table above. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to:
A) Rise to 7 percent
B) Rise to 6 percent
C) Fall to 4 percent
D) Fall to 5 percent

Question

Refer to the table above. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to:
A) Rise to 7 percent 
B) Rise to 6 percent 
C) Fall to 4 percent 
D) Fall to 5 percent

Quizplus · Accepted Answer

The Answer of  Refer to the table above. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to:
A) Rise to 7 percent 
B) Rise to 6 percent 
C) Fall to 4 percent 
D) Fall to 5 percent

Refer to the Table Above