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Answer the Question on the Basis of the Following Table

Question 31

Multiple Choice

Answer the question on the basis of the following table in which columns (1) and (2) indicate the transactions demand (Dt) for money and columns (1) and (3) show the asset demand (Da) for money: (1) Interest Rate12%108642(2) Dt$100100100100100100(3) Da$020406080100\begin{array}{c}\begin{array}{c}(1) \\\underline{\text {Interest Rate}}\\12 \% \\10 \\8 \\6 \\4 \\2\end{array}\begin{array}{c}(2) \\\underline{D_{t} }\\ \$ 100 \\100 \\100 \\100 \\100 \\100\end{array}\begin{array}{c}(3) \\\underline{D_{a}} \\\$ 0 \\20 \\40 \\60 \\80 \\100\end{array}\end{array}
Refer to the given data.If the money supply is $160,the equilibrium interest rate will be:


A) 10 percent.
B) 8 percent.
C) 6 percent.
D) 4 percent.

Correct Answer:

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