Use the Table Below to Answer the Questions

question 2

Essay

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?

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Definitions:

Intangible Asset

An asset that lacks physical substance but is identifiable and provides economic benefits to the owner, such as patents or trademarks.

Accumulated Depletion

The total amount of natural resource extraction that has been charged as an expense against a company's earnings.

Natural Resource

Materials or substances occurring in nature that can be exploited for economic gain, such as minerals, forests, and water.

Balance Sheet

A financial statement summarizing a company's assets, liabilities, and equity at a specific point in time.