Macroeconomics 1st Edition by Campbell McConnell,Stanley Brue,Sean Flynn

تمرين 2

Assume that the following data characterize a hypothetical economy: money supply = $200 billion; quantity of money demanded for transactions = $150 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2 percentage point fall in the interest rate.
a. What is the equilibrium interest rate Explain.