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Figure 34-1 INTEREST RATE (Percent) 5.25 4.25 3.25 P MS QUANTITY OF MONEY Money Demand Refer to Figure 34-1. If the current interest rate is 3.25 percent, O people will sell more bonds, which drives interest rates up. O the quantity of money supplied is greater than the quantity of money demanded. there is an excess supply of money. as the money market moves to equilibrium, people will buy more goods.

Figure 34-1 INTEREST RATE (Percent) 5.25 4.25 3.25 P MS QUANTITY OF MONEY Money Demand Refer to Figure 34-1. If the current interest rate is 3.25 percent, O people will sell more bonds, which drives interest rates up. O the quantity of money supplied is greater than the quantity of money demanded. there is an excess supply of money. as the money market moves to equilibrium, people will buy more goods.

MACROECONOMICS
MACROECONOMICS
14th Edition
ISBN:9781337794985
Author:Baumol
Publisher:Baumol
Chapter13: Monetary Policy: Conventional And Unconventional
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Figure 34-1 INTEREST RATE (Percent) 5.25 4.25 3.25 P MS QUANTITY OF MONEY Money Demand Refer to Figure 34-1. If the current interest rate is 3.25 percent, O people will sell more bonds, which drives interest rates up. O the quantity of money supplied is greater than the quantity of money demanded. there is an excess supply of money. as the money market moves to equilibrium, people will buy more goods.
Transcribed Image Text:Figure 34-1 INTEREST RATE (Percent) 5.25 4.25 3.25 P MS QUANTITY OF MONEY Money Demand Refer to Figure 34-1. If the current interest rate is 3.25 percent, O people will sell more bonds, which drives interest rates up. O the quantity of money supplied is greater than the quantity of money demanded. there is an excess supply of money. as the money market moves to equilibrium, people will buy more goods.
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