The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis.In this figure,an increase in the interest rate will cause a movement from:

A) point B to point A.
B) point A to point B.
C) DM to DM'.
D) DM to DM*.
E) point E to point D.

Question

The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis.In this figure,an increase in the interest rate will cause a movement from:

A) point B to point A.
B) point A to point B.
C) DM to DM'.
D) DM to DM*.
E) point E to point D.

Pritish Gupta · Accepted Answer

Final Answer : A, Explanation :  According to the figure, as the interest rate increases, the quantity of money demanded decreases. This results in a movement along the demand curve from point B to point A. Therefore, the correct answer is A.

The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis.In this figure,an increase in the interest rate will cause a movement from:

A) point B to point A.
B) point A to point B.
C) DM to DM'.
D) DM to DM*.
E) point E to point D.

Definitions

Learning Objectives

Learning Objectives

Related questions

The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis.In this figure,an increase in the interest rate will cause a movement from:A) point B to point A.B) point A to point B.C) DM to DM'.D) DM to DM*.E) point E to point D.

Definitions

Learning Objectives

Learning Objectives

Related questions

The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis.In this figure,an increase in the interest rate will cause a movement from:

A) point B to point A.
B) point A to point B.
C) DM to DM'.
D) DM to DM*.
E) point E to point D.