Use the Table Below to Answer the Questions

question 7

Essay

Use the table below to answer the questions:
(a) If the transactions demand for money equals 10% of nominal GDP, nominal GDP is $800 billion, and the money supply is $480 billion, what is the equilibrium interest rate?
(b) If nominal GDP remains constant, and the money supply is decreased from $480 to $380 billion, what will the equilibrium rate of interest be?

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Definitions:

Impact Evaluation

Impact evaluation assesses the changes that can be attributed to a particular intervention, including what outcomes would have happened in the absence of the intervention. It focuses on the causality between actions and outcomes.

Process Evaluation

Analysis of the components and the implementation of a program, aimed at understanding how it operates and its effectiveness.

Outcome Evaluation

Assessment focused on the actual impacts or outcomes resulting from the implementation of a program or activity.

Outcome Evaluation

The process of determining the results or impacts of an activity or program.