On any given day, ________ changes to achieve equilibrium in the money market.
A) real GDP
B) the price level
C) the inflation rate
D) the nominal interest rate
E) the real interest rate

Question

Quizplus · Accepted Answer

The nominal interest rate adjusts to achieve equilibrium in the money market. When there is excess supply of money, the nominal interest rate decreases and when there is excess demand for money, the nominal interest rate increases, eventually reaching the equilibrium level.

On Any Given Day, ________ Changes to Achieve Equilibrium in the Money