The total demand for money is equal to the transactions demand plus the asset demand for money.(a) Assume that each dollar held for transactions purposes is spent on the average five times per year to buy final goods and services.If nominal GDP is $800 billion, what is the transactions demand?
(b) The table below shows the asset demand at certain rates of interest.Using your answer to part (a), complete the table to show the total demand for money at various rates of interest. 
(c) If the money supply is $240 billion, what will be the equilibrium rate of interest?
(d) If the money supply rises, will the equilibrium rate of interest rise or fall?
(e) If GDP rises, will the equilibrium rate of interest rise or fall?
Definitions:
Free Entry
The condition in which new firms can enter the market with no or minimal barriers, promoting competition.
Imperfect Competition
Imperfect competition describes a market structure where the conditions for perfect competition are not met, due to factors like monopolies and product differentiation.
Monopolistic Competition
A market structure in which many companies sell products that are similar but not identical, allowing for competition based on price, quality, and innovation.
Oligopoly
A market structure characterized by a small number of firms dominating the market, leading to limited competition.
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