Use the table below to answer the questions:
(a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $800 billion, and the money supply is $480 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is decreased from $480 to $380 billion, what will the equilibrium rate of interest be?

Question

Use the table below to answer the questions:
  (a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $800 billion, and the money supply is $480 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is decreased from $480 to $380 billion, what will the equilibrium rate of interest be?

Quizplus · Accepted Answer

The Answer of Use the table below to answer the questions:
  (a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $800 billion, and the money supply is $480 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is decreased from $480 to $380 billion, what will the equilibrium rate of interest be?

Use the Table Below to Answer the Questions