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Figure 8.5.1 Refer to Figure 8.5.1, which shows possible outcomes in ...

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Short Description: A line graph of interest rate versus real money. Long Description: The vertical axis is labelled, interest rate (percent per year) and the horizontal axis is labelled, real money (billions of 20 12 dollars). The line for M D2 slopes downward from the upper left corner to the lower right corner passing through the points B, A, and C from top to bottom. The line for M D1 slopes downward from the upper left corner to the lower right corner, parallel to the line for M D2 on the right and passing through the point E. The line for M D3 slopes downward from the upper left corner to the lower right corner, parallel to the line for M D2 on the left and passing through the point F. The points F, A, and E are at the same vertical height.

Figure 8.5.1

Refer to Figure 8.5.1, which shows possible outcomes in the money market. Which of the following changes shows the effect of a rise in the market price of bonds?
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