Question
If there is an excess demand for money at the prevailing interest rate, the likely response is the until the quantity demanded of money equals
If there is an excess demand for money at the prevailing interest rate, the likely response is the until the quantity demanded of money equals the quantity supplied of money.
a. Money demand curve will shift to the right, causing the price of bonds to increase and the interest rate to fall.
b. Money supply curve will shift to the right.
C. Corresponding excess demand of bonds will cause the price of bonds to decrease and the interest rate to rise.
d. Corresponding excess supply of bonds will cause the price of bonds to decrease and the interest rate to rise.
e. Money supply curve will shift to the left
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