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According to demand for funds curve, demand curve shifts to right if there is increase in
Answer & Solution
Correct Answer:
Option
B
According to demand for funds curve, demand curve shifts to right if there is increase in equilibrium interest rate. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
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