Use the table below to answer the questions. (a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $600 billion, and the money supply is $360 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is increased from $360 to $460 billion, what will the equilibrium rate of interest be?

Question

Use the table below to answer the questions.  (a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $600 billion, and the money supply is $360 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is increased from $360 to $460 billion, what will the equilibrium rate of interest be?

Quizplus · Accepted Answer

The Answer of Use the table below to answer the questions.  (a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $600 billion, and the money supply is $360 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is increased from $360 to $460 billion, what will the equilibrium rate of interest be?

Use the Table Below to Answer the Questions