$$\begin{array} { | c | c | }
\hline \text { Interest Rate } & \text { Asset Demand for Money (Billions) } \
\hline 7 \% & \$ 200 \
\hline 6 & 300 \
\hline 5 & 400 \
\hline 4 & 500 \
\hline
\end{array}$$ Refer to the table. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to
A) rise to 7 percent.
B) rise to 6 percent.
C) fall to 4 percent.
D) fall to 5 percent.

Question

$$\begin{array} { | c | c | } 
\hline \text { Interest Rate } & \text { Asset Demand for Money (Billions) } \
\hline 7 \% & \$ 200 \
\hline 6 & 300 \
\hline 5 & 400 \
\hline 4 & 500 \
\hline
\end{array}$$ Refer to the table. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to
A) rise to 7 percent.
B) rise to 6 percent.
C) fall to 4 percent.
D) fall to 5 percent.

Quizplus · Accepted Answer

The Answer of $$\begin{array} { | c | c | } 
\hline \text { Interest Rate } & \text { Asset Demand for Money (Billions) } \
\hline 7 \% & \$ 200 \
\hline 6 & 300 \
\hline 5 & 400 \
\hline 4 & 500 \
\hline
\end{array}$$ Refer to the table. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to
A) rise to 7 percent.
B) rise to 6 percent.
C) fall to 4 percent.
D) fall to 5 percent.

Refer to the Table