$$\begin{array} { c c c }
\begin{array} { c }
\text { Nominal interest rate } \
\text { (percent per year) }
\end{array} & \begin{array} { c }
\text { Quantity of } \
\text { (trillions of demanded }
\end{array} & \begin{array} { c }
\text { Quantity of } \
\text { money supplied } \
\text { (trillions of dollars) }
\end{array} \
\hline 5 & 2.9 & 2.5 \
6 & 2.8 & 2.5 \
7 & 2.7 & 2.5 \
8 & 2.6 & 2.5 \
9 & 2.5 & 2.5 \
10 & 2.4 & 2.5
\end{array}$$
-The above table has the demand and supply schedules for money.If the Fed increases the quantity of money by $0.1 trillion, the new equilibrium nominal interest rate is
A) 8 percent.
B) 9 percent.
C) 7 percent.
D) 5 percent.
E) 6 percent.

Question

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Nominal interest rate } \
\text { (percent per year) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { (trillions of demanded }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { money supplied } \
\text { (trillions of dollars) }
\end{array} \
\hline 5 & 2.9 & 2.5 \
6 & 2.8 & 2.5 \
7 & 2.7 & 2.5 \
8 & 2.6 & 2.5 \
9 & 2.5 & 2.5 \
10 & 2.4 & 2.5
\end{array}$$
-The above table has the demand and supply schedules for money.If the Fed increases the quantity of money by $0.1 trillion, the new equilibrium nominal interest rate is
A) 8 percent.
B) 9 percent.
C) 7 percent.
D) 5 percent.
E) 6 percent.

Quizplus · Accepted Answer

The increase in the quantity of money supplied will shift the supply curve to the right, leading to a lower equilibrium nominal interest rate. The new equilibrium will be at the intersection of the new supply curve and the demand curve, which is at a nominal interest rate of 8 percent.

-The Above Table Has the Demand and Supply Schedules for \text

-The Above Table Has the Demand and Supply Schedules for
\text