Suppose an event has occurred that has decreases money demand. This will cause the equilibrium interest rate to g

Complete Question:

Suppose an event has occurred that has decreased money demand. This will cause the equilibrium interest rate to: Multiple Choice decrease, but equilibrium quantity to remain constant. decrease, but equilibrium quantity to increase. increase, but equilibrium quantity to decrease. Increase, but equilibrium quantity to remain constant.

Suppose an event has occurred that has decreased money demand. This will cause the equilibrium interest rate to:

decrease, but equilibrium quantity to increase.

Explanation:

Money demand equilibrium occurs at the interest rate at which the quantity of money demanded equals the quantity of money supplied.  This implies that all other things unchanged, a shift in money demand will lead to a change in the equilibrium interest rate.  This result will come about because with the reduced interest rate, more consumers and businesses will be angling for more loans.

answer; im thinking the correct answer is (7years);

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