Macroeconomics ACTIVITY 4-4 (CONTNUED) 1. Now suppose there is an increase in the money supply. Show the change in the money supply and the resulting change in the equilibrium interest rate on Figure 4-4.1 What happens to the quantity of money demanded when the interest rate changes? Explain. 137 2. Now draw a new graph of the money market, illustrating the equilibrium interest rate. 3. Suppose the demand for money increases. Show the change in money demand and the resulting interest rate on your graph. What happens to the quantity demanded of money? Explain