Figure 35-1 A graph of Interest Rate versus Quantity of Money shows a straight line, Money Demand, decreasing linearly, and a vertical line, M S, extending from the horizontal axis. 3 horizontal lines extend from the vertical axis from the following values, from highest to lowest. 4%, 3%, and 2%. The 4% line passes through Money Demand at point a, to the left of M S, and touches M S at point b, above the intersection of Money Demand and M S. The 3% line touches the intersection of Money Demand and M S at point c. The 2% line passes through M S below the intersection of Money Demand and M S, and touches Money Demand at point d, to the right of M S. Refer to Figure 35-1. If the current interest rate is 2 percent, a. there is an excess supply of money. b. people will sell more bonds, which drives interest rates up. c. as the money market moves to equilibrium, people will buy more goods. d. the quantity of money supplied is greater than the quantity of money demanded