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1'2 E a N I m I a : E3: IIE} --------- 1L ''''' EU- 5 .' Quantity of Money FIGURE 27-2 Refer to Figure
1'2 E a N I m I a : E3: IIE} --------- 1L ''''' EU- 5 .' Quantity of Money FIGURE 27-2 Refer to Figure 212. If the interest rate is {2, the subsequent adjustment in the money market is as follows: Select one: Q a. Excess supply of money leads to the purchase of bonds, which in turn causes the interest rate to fall to EU. b. The interest rate will remain at [2, because the money market is in equilibrium at this interest rate. c. M; curve will shift to the left as to maintain the interest rate at E2. d. Excess demand for money leads to a sale of bonds, which in turn causes the interest rate to rise. 0000 e. Excess supply of money leads to the sale of bonds, which in turn causes the interest rate to fall
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