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Figure 13-2 Refer to Figure 13-2. Suppose the economy is initially in equilibrium at point B. Which of the following statements correctly describes what would
Figure 13-2 Refer to Figure 13-2. Suppose the economy is initially in equilibrium at point B. Which of the following statements correctly describes what would happen in this market if the Bank of Canada buys bonds on the open market in an effort to increase the money supply to MS1? a. The money demand curve would shift left to MD0 as a result, and the interest rate would fall from i3 to i0. b. The economy would move from point B to point D, and the interest rate would fall. c. The economy would move from point B to point C, and the interest rate would fall. d. The money demand curve would shift left to MD0 as a result, and the interest rate would fall from i3 to i1
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