If the interest rate is above the equilibrium rate, how is equilibrium achieved in the money market?
A) People buy goods to get rid of their excess money, lowering the price of goods and lowering the interest rate.
B) People sell goods to get rid of their excess money, lowering the price of goods and lowering the interest rate.
C) People sell bonds to get rid of their excess money, lowering the price of bonds and lowering the interest rate.
D) People sell bonds to get rid of their excess money, raising the price of bonds and lowering the interest rate.
E) People buy bonds to get rid of their excess money, raising the price of bonds and lowering the interest rate.
Correct Answer:
Verified
Q86: Use the figure below to answer the
Q87: If households and firms find they are
Q88: Nominal money is equal to real
A)money times
Q89: Which one of the following will shift
Q90: Everything else remaining the same, an increase
Q92: Use the figure below to answer the
Q93: Use the figure below to answer the
Q94: Use the figure below to answer the
Q95: If the interest rate is below the
Q96: Money market equilibrium occurs
A)when interest rates are
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents