$$\begin{array} { | c | c | c | c | }
\hline \text { Interest Rate } & \begin{array} { c }
\text { Transactions Demand for } \
\text { Money }
\end{array} & \begin{array} { c }
\text { Asset Demand for } \
\text { Money }
\end{array} &Money~Supply\
\hline 2 \% & \$ 220 & \$ 300 & \$ 460 \
\hline 4 & 220 & 280 & 460 \
\hline 6 & 220 & 260 & 460 \
\hline 8 & 220 & 240 & 460 \
\hline 10 & 220 & 220 & 460 \
\hline
\end{array}$$ Based on the given table, at equilibrium in the given market for money, the total amount of money demanded is
A) $500.
B) $480.
C) $460.
D) $440.

Question

$$\begin{array} { | c | c | c | c | } 
\hline \text { Interest Rate } & \begin{array} { c } 
\text { Transactions Demand for } \
\text { Money }
\end{array} & \begin{array} { c } 
\text { Asset Demand for } \
\text { Money }
\end{array} &Money~Supply\
\hline 2 \% & \$ 220 & \$ 300 & \$ 460 \
\hline 4 & 220 & 280 & 460 \
\hline 6 & 220 & 260 & 460 \
\hline 8 & 220 & 240 & 460 \
\hline 10 & 220 & 220 & 460 \
\hline
\end{array}$$ Based on the given table, at equilibrium in the given market for money, the total amount of money demanded is
A) $500.
B) $480.
C) $460.
D) $440.

Quizplus · Accepted Answer

At equilibrium, the transactions demand for money plus the asset demand for money equals the money supply. In this case, the transactions demand is constant at $220, while the asset demand decreases as the interest rate increases. At an interest rate of 2\%, the asset demand is $300, which brings the total demand to $520, exceeding the money supply of $460. As the interest rate increases, the asset demand decreases, bringing the total demand down. At an interest rate of 8\%, the asset demand is $240, bringing the total demand to $460, which is equal to the money supply. Therefore, the total amount of money demanded at equilibrium is $460.

Based on the Given Table, at Equilibrium in the Given