Table 9.1 contains data relating to the money market.

-Refer to Table 8.1 to answer this question.What are the implications if the current supply of money is $160 and the interest rate is 7 percent?

Question

Table 9.1 contains data relating to the money market.
 
-Refer to Table 8.1 to answer this question.What are the implications if the current supply of money is $160 and the interest rate is 7 percent?

Quizplus · Accepted Answer

If the current supply of money is $160 and the interest rate is 7 percent, it implies that the money supply is greater than the money demand at that interest rate, leading to a surplus of money. This surplus will cause the interest rate to fall as people try to lend out their excess money, driving down the cost of borrowing.

Table 91 Contains Data Relating to the Money Market