Answer the question on the basis of the following information.For transactions,households and businesses want to hold an amount of money equal to one-half of nominal GDP.The table shows the amounts of money they want to hold as an asset at various interest rates. $\begin{array}{l}
\begin{array}{cc}
\underline{\text { Interest Rate} } & \underline{\text { Amount of Money Demanded }}\
10 \% & \$ 20 \
8 & 40 \
6 & 60 \
4 & 80 \
2 & 100
\end{array}
\end{array}$ Refer to the given information.If nominal GDP is $200 and the interest rate is 6 percent,the total amount of money that households and businesses will want to hold is:
A) $120.
B) $140.
C) $160.
D) $180.

Question

Quizplus · Accepted Answer

If households and businesses want to hold an amount of money equal to one-half of nominal GDP, and the nominal GDP is $200, then they will want to hold $100 as an asset.
The table shows that at an interest rate of 6 percent, households and businesses want to hold $160 as an asset.
Therefore, the total amount of money that households and businesses will want to hold is $160.

Answer the Question on the Basis of the Following Information