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Refer to the Graph Above, in Which Dt Is the Transactions

Question 19

Multiple Choice

  Refer to the graph above, in which D<sub>t</sub> is the transactions demand for money, D<sub>m</sub> is the total demand for money, and S<sub>m</sub> is the supply of money. The market is initially in equilibrium at a 6 percent rate of interest. If the supply of money increases as shown<sub>,</sub> then the asset demand for money will increase by: A)  $75 B)  $125 C)  $200 D)  $325 Refer to the graph above, in which Dt is the transactions demand for money, Dm is the total demand for money, and Sm is the supply of money. The market is initially in equilibrium at a 6 percent rate of interest. If the supply of money increases as shown, then the asset demand for money will increase by:


A) $75
B) $125
C) $200
D) $325

Correct Answer:

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