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# The money market is in equilibrium at an interest rate of 4 percent and a quantity of money equal to \$4,500 billion.

14. The money market is in equilibrium at an interest rate of 4 percent and a quantity of money equal to \$4,500 billion. Suppose the Federal Reserve, through its open market operations, purchased government bonds. What is a possible new equilibrium in the money market depicted in the figure? A. interest rate: 8 percent equilibrium quantity of money: \$4,500 billion b. interest rate: 6 percent equilibrium quantity of money: \$5,500 billion c. interest rate: 4 percent equilibrium quantity of money: \$4,500 billion d. interest rate: 2 percent equilibrium quantity of money: \$5,500 billion 15. Misperceptions, sticky wages, and sticky prices are each theories that explain why in the short run the a. aggregate demand curve has a negative slope. B. aggregate supply curve has a positive slope. C. money supply curve has a positive slope. D. money demand curve has a negative slope. 16. Suppose the model of aggregate demand and aggregate supply depicted in the figure is in equilibrium at point

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