Answer the question based on 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. If nominal GDP is $300 and the supply of money is $250, the equilibrium interest rate will be Interest Rate Amount of Money Demanded as an Asset 10% $20 8 40 6 60 4 80 2 100 Multiple Choice 4 percent. 10 percent. 6 percent. 8 percent. 2 percent.
Answer the question based on 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. If nominal GDP is $300 and the supply of money is $250, the equilibrium interest rate will be Interest Rate Amount of Money Demanded as an Asset 10% $20 8 40 6 60 4 80 2 100 Multiple Choice 4 percent. 10 percent. 6 percent. 8 percent. 2 percent.
Chapter16: Monetary Policy
Section: Chapter Questions
Problem 2SQP
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Answer the question based on 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.
If nominal GDP is $300 and the supply of money is $250, the equilibrium interest rate will be
Interest Rate | Amount of Money Demanded as an Asset |
10% | $20 |
8 | 40 |
6 | 60 |
4 | 80 |
2 | 100 |
Multiple Choice
-
4 percent.
-
10 percent.
-
6 percent.
-
8 percent.
-
2 percent.
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