Suppose that the current money market equilibrium features an interest rate of 5 percent and a quantity of $2 trillion. If the Fed raises the discount rate, which of the following ismostlikely to be the new money market equilibrium?

a. An interest rate of 6 percent and a quantity of $1.5 trillion.
b. An interest rate of 5 percent and a quantity of $2 trillion.
c. An interest rate of 4 percent and a quantity of $2.5 trillion.
d. None of the above.


a

Economics

You might also like to view...

When negative network externalities are present

A) the demand curve is more elastic than otherwise. B) the demand curve is less elastic than otherwise. C) the demand curve shifts to the right. D) the demand curve shifts to the left.

Economics

When the rate of cyclical unemployment is zero, the

a. natural rate of unemployment must also be zero. b. rate of frictional unemployment must be negative. c. economy must have entered a recessionary stage. d. economy is considered to be at full employment.

Economics

Which philosophy, advocated by Alexander Hamilton's "Report on Manufactures" as a means to create strong U.S. development, also successfully worked for Germany and Japan?

a. protectionism b. socialism c. isolationism d. capitalism

Economics

In moving along a demand curve, which of the following is not held constant?

A. the price of the product for which the demand curve is relevant B. consumer incomes C. people's tastes and preferences D. price expectations

Economics