The Supply of money and money Market Equilibrium · How Does the interest rateⅤ ariation Ensure the money market Equilibrium (mechanism analysis) Suppose the interest rate to be lower than the equilibrium interest rate. In this case the ere v be an excess demand for money indicating people will sell their bonds to exchange for moneyThe Supply of Money and Money Market Equilibrium • How Does the Interest Rate Variation Ensure the Money Market Equilibrium (mechanism analysis) – Suppose the interest rate to be lower than the equilibrium interest rate. In this case, there will be an excess demand for money indicating people will sell their bonds to exchange for money