The graph shows the demand for money curve. Draw the supply of money curve if the equilibrium interest rate is 4 percent a year. Label it MS. Draw a point at the equilibrium quantity of money and nominal interest rate. ... --- Nominal interest rate (percent per year) C 8- G 7- 6- G 5- 4- 3- 2- 0+ 3.8 3.9 4.0 MD 4.1 4.2 Quantity of money (trillions of dollars) >>> Draw only the objects specified in the question.

If the equilibrium price of bonds increases, what happens to the associated interest rate?   A. Interest rate increases   B. Interest rate declines   C. Interest rate does not change

K The graph shows the demand for money curve. Draw a point to show the interest rate and quantity of money demanded when the interest rate is 5 percent a year. Draw an arrow to show the effect of an increase in the interest rate above 5 percent a year. Label it 1. Draw an arrow to show the effect of a decrease in the interest rate below 5 percent a year. Label it 2. When the interest rate rises, other things remaining the same, the opportunity cost of holding money and A. rises; the demand for money decreases B. falls; the demand for money increases O C. falls; the quantity of money demanded increases OD. rises; the quantity of money demanded decreases 8- 6- 4 2- 0+ Interest rate (percent per year) 2.7 MDO 2.9 3.1 3.3 Real money (trillions of 2007 dollars) >>> Draw only the objects specified in the question. 3.5 € G

In the graph you've just explored, by how much does the quantity of money demanded change if the interest rate rises from 5 percent to 6 percent? A. $9 trillion B. $1 trillion C. $10 trillion