When the interest rate is above the equilibrium level,
a. the quantity of money that people want to hold is less than the quantity of money that the Federal Reserve has supplied.
b. people respond by buying interest-bearing bonds or by depositing money in interest-bearing bank accounts.
c. bond issuers and banks respond by lowering the interest rates they offer.
d. All of the above are correct.
d
You might also like to view...
Which market type has characteristics as follows: large number of firms, differentiated product?
A) perfect competition B) monopolistic competition C) oligopoly D) monopoly
As predicted by the economic growth model, countries that start with lower levels of GDP per capita always grow faster than countries that start with higher levels of GDP per capita
Indicate whether the statement is true or false
Refer to above Table 2-2. What is the nominal GDP in year 2?
A) $18.60 B) $14.60 C) $18.00 D) 400 units
What is the usual shape of the production possibilities curve?
a. upward-sloping b. bowed-out from the origin c. bowed-in from the origin d. a straight-line, downward-sloping curve e. U-shaped