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Figure: Equilibrium in the Money Market
-(Figure: Equilibrium in the Money Market) Look at the figure Equilibrium in the Money Market. Equilibrium will occur at interest rate _____ and quantity of money _____.

Question

Use the following to answer questions :
Figure: Equilibrium in the Money Market 
-(Figure: Equilibrium in the Money Market) Look at the figure Equilibrium in the Money Market. Equilibrium will occur at interest rate _____ and quantity of money _____.

Quizplus · Accepted Answer

Equilibrium occurs at the point where the supply of money (rS) intersects with the demand for money (MD), which is at an interest rate of 11% and a quantity of money of 1100 billion dollars. Option C is the only one that correctly identifies both the interest rate and quantity of money at equilibrium.

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