$$\begin{array} { | c | c | c | c | }
\hline \text { Money Supply } & \text { Money Demand } & \text { Interest Rate } & \begin{array} { c }
\text { Investment (at Interest } \
\text { Rate Shown) }
\end{array} \
\hline \$ 400 & \$ 600 & 2 \% & \$ 700 \
\hline \$ 400 & 500 & 3 & 600 \
\hline \$ 400 & 400 & 4 & 500 \
\hline \$ 400 & 300 & 5 & 300 \
\hline \$ 400 & 200 & 6 & 200 \
\hline
\end{array}$$
Answer the question based on the information in the table. The amount of investment that will be forthcoming in this economy at
equilibrium is
A) $700.
B) $600.
C) $500.
D) $300.

Question

$$\begin{array} { | c | c | c | c | } 
\hline \text { Money Supply } & \text { Money Demand } & \text { Interest Rate } & \begin{array} { c } 
\text { Investment (at Interest } \
\text { Rate Shown) }
\end{array} \
\hline \$ 400 & \$ 600 & 2 \% & \$ 700 \
\hline \$ 400 & 500 & 3 & 600 \
\hline \$ 400 & 400 & 4 & 500 \
\hline \$ 400 & 300 & 5 & 300 \
\hline \$ 400 & 200 & 6 & 200 \
\hline
\end{array}$$
Answer the question based on the information in the table. The amount of investment that will be forthcoming in this economy at
equilibrium is
A) $700.
B) $600.
C) $500.
D) $300.

Quizplus · Accepted Answer

Equilibrium in the money market occurs when money supply equals money demand. According to the table, this happens when both are $400, which corresponds to an interest rate of 4% and an investment amount of $500.

Answer the Question Based on the Information in the Table