If the quantity of money demanded exceeds the quantity of money supplied at a given interest rate, what will happen to restore the market to equilibrium?
a. The public will try to buy bonds, the price of bonds will increase, and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect at the market interest rate.
b. The public will try to sell bonds, the price of bonds will decrease, and the interest rate will rise until equilibrium is attained where the money demand and supply curves intersect at the market interest rate.
c. The public will try to sell bonds, the price of bonds will increase, and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect.
d. The public will try to buy bonds, the price of bonds will increase, and the interest rate will rise until equilibrium is attained where the money demand and supply curves intersect.
e. The public will try to buy bonds, the price of bonds will decrease, and the interest rate will fall until equilibrium is attained where the money demand and supply curves intersect.
B
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What will be an ideal response?