Question

If there is initially an Group of answer choices excess supply of money, the interest rate will fall, and if there is initially an excess demand, it will rise. excess demand for money, the interest rate will fall, and the supply of money it will rise. excess supply of money, the interest rate will rise, and if there is also an excess demand, it will rise rapidly. excess supply of money, the interest rate will fall, and if there is also an excess demand, it will fall rapidly. excess supply of money, the interest rate will rise, and if there is initially an excess demand, it will fall.

Answer 1

excess supply of money, the interest rate will fall, and if there is initially an excess demand, it will rise.

Step-by-step explanation:

When there is an excess supply of money, there would be an increase in the demand for bonds. This would lead to a rise in the price of bonds and a decrease in the interest rate

When there is an excess demand for money, there would be a decrease in the demand for bond. This would lead to a reduction in the price of bond and an increase in the interest rate