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Figure 14.3.1 Refer to Figure 14.3.1, which shows the money market. Eve...

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The figure includes 4 graphs. On each graph, the horizontal axis represents real money in 2012 dollars and t The vertical axis represents the interest rate in percent per year. Graph a shows a vertical line labelled MS. A downward-sloping line that intersects MS is labelled MD0. A downward-sloping line that intersects MS and lies to the right of MD0 is labelled MD1. A rightward arrow lies between MD0 and MD1. Graph b shows a vertical line labelled MS. A downward-sloping line that intersects MS is labelled MD0. A downward-sloping line that intersects MS and lies to the left of MD0 is labelled MD1. A leftward arrow lies between MD0 and MD1. Graph c shows a downward-sloping line labelled MD. A vertical line that intersects MD is labelled MS0. A vertical line that lies to the right of MS0 is labelled MS1. A rightward arrow lies between MS0 and MS1. Graph d shows a downward-sloping line labelled MD. A vertical line that intersects MD is labelled MS0. A vertical line that lies to the left of MS0 is labelled MS1. A leftward arrow lies between MS0 and MS1.

Figure 14.3.1

Refer to Figure 14.3.1, which shows the money market. Everything else remaining the same, which graph best illustrates the effect of the Bank of Canada lowering the overnight rate?

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