46) In the money market, if the nominal interest rate is below the equilibrium l

Question

46) In the money market, if the nominal interest rate is below the equilibrium level, A) the quantity of money demanded exceeds the quantity of money supplied. B) the quantity of money supplied exceeds the quantity of money demanded. C) asset prices will rise. D) the demand for money curve will shift leftward. E) the supply of money curve will shift lefrward because 47) Other things the same, if the Fed increases the quantity of money, the A) nominal interest rate decreases; the supply of money curve shifts rightward B) nominal interest rate decreases; the supply of money curve shifts leftward C) nominal interest rate does not change; only the real interest rate is effected D) nominal interest rate increases; the supply of money curve shifts rightward E) nominal interest rate increases, the supply of money curve shifts leftward Nominal interest rate (percent per year) MS MD 3 6 9.2 15 Money (trillions of dollars) 48) In the above figure, the equilibrium interest rate isand the equilibrium quantity of money is_ A) 8 percent; $1.2 B) 4 percent;$0.6 C) 4 percent; $1.2 D) 8 percent, $0.6 E) 0 percent, $1.2 trillion. 49) In the above figure, if the interest rate is 3 percent per year, the quantity of money demanded is A) less than the quantity of money supplied, and the interest rate will change. B) greater than the quantity of money supplied, and the interest rate will change. Q) less than the quantity of money supplied, and the demand for money curve will shift. D) greater than the quantity of money supplied, and the demand for money curve will shift. E) greater than the quantity of money supplied, and the supply of money curve will shift.

Explanation / Answer

46.a) is correct option

if in the money market the nominal interest rate is lower than the equilibrium interest rate then money demanded is greater than the money supplied it is because at lower interest rate the opportunity cost of holding money is less hence there is lot of demand.

47.a) is correct answer

Is fed increases quantity of money in an economy then interest rate decreases and money supply curve shift rightwards

48 b) is correct

According to figure the corresponding interest rate is 4% represented by the vertical axis and the quantity of money is .6 trillion represented by horizontal axis.

49e) is correct option

At lower interest rate quantity of money demanded is more than the quantity of money supplied because the opportunity cost of holding money is less hence money supply curve shift to the right.

thanx

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