Refer to the information provided in Figure 11.4 below to answer the questions that follow.
Figure 11.4
-Refer to Figure 11.4.The money market will be in equilibrium at an interest rate of

Question

Refer to the information provided in Figure 11.4 below to answer the questions that follow.
  Figure 11.4
-Refer to Figure 11.4.The money market will be in equilibrium at an interest rate of

Quizplus · Accepted Answer

At an interest rate of 5%, the quantity of money demanded (Qd) equals the quantity of money supplied (Qs) in the money market, which will bring the market to equilibrium. This can be seen at the point where the demand curve intersects with the supply curve in Figure 11.4. At any other interest rate, there will be either excess demand or excess supply of money, which will lead to adjustments in the market to reach equilibrium. Therefore, option C is the correct answer.

Refer to the Information Provided in Figure 11