$.$ If the interest rate is at i Subscript b there is an excess

Part $6$

A$.$

supply of$$ money, resulting in lower bond$$ demand, lowering bond$$ prices, decreasing interest rates to$$ i$*.$

B$.$

demand for$$ money, resulting in higher bond$$ demand, raising bond$$ prices, decreasing interest rates to$$ i$*.$

C$.$

demand for$$ money, resulting in lower bond$$ demand, lowering bond$$ prices, decreasing interest rates to$$ i$*.$

D$.$

supply of$$ money, resulting in higher bond$$ demand, raising bond$$ prices, decreasing interest rates to$$ i$*.$