Refer to the graph below, in which Dt is the transactions demand for money, Dm is the total demand for money, and Sm is the supply of money. If the market for money is in equilibrium at a 6 percent rate of interest and the money supply increases, then Sm2 will shift to: A GraphThis graph shows a combination of Quantity of money and rate of interest on X and Y axis respectively, showing a transaction demand for money curve labelled as Dt starts from 125 and is parallel to Y axis then three supply of money curves labelled as Sm1,Sm2 and Sm3 starting from 175,250 and 325 respectively and are parallel to Y axis, total demand for money curve is labelled as Dm downward sloping and intersecting all the other curves. Multiple Choice Sm3 and the interest rate will be 8 percent. Sm1 and the interest rate will be 8 percent. Sm1 and the interest rate will be 4 percent. Sm3 and the interest rate will be 4 percent.