It is assumed that households and businesses want to hold for transactions purposes an amount of money equal to one-half of the GDP.The table shows the amounts of money that households and businesses want to hold as an asset at various interest rates.

-Refer to the information above.If the GDP is $300 and the supply of money is $230,the equilibrium interest rate will be:
A) 8 percent.
B) 6 percent.
C) 2 percent.
D) 4 percent.

Question

It is assumed that households and businesses want to hold for transactions purposes an amount of money equal to one-half of the GDP.The table shows the amounts of money that households and businesses want to hold as an asset at various interest rates.
 
-Refer to the information above.If the GDP is $300 and the supply of money is $230,the equilibrium interest rate will be:
A) 8 percent. 
B) 6 percent. 
C) 2 percent. 
D) 4 percent.

Quizplus · Accepted Answer

The Answer of It is assumed that households and businesses want to hold for transactions purposes an amount of money equal to one-half of the GDP.The table shows the amounts of money that households and businesses want to hold as an asset at various interest rates.
 
-Refer to the information above.If the GDP is $300 and the supply of money is $230,the equilibrium interest rate will be:
A) 8 percent. 
B) 6 percent. 
C) 2 percent. 
D) 4 percent.

It Is Assumed That Households and Businesses Want to Hold