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?
Definitions:
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A specific duration of time used for financial reporting and budgeting purposes, typically a year, quarter, or month.
Working Papers
Documents that serve as preliminary reports or studies, often used in academic or professional research to share ideas and findings before formal publication.
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Papers and records reviewed during an audit to assess the accuracy and compliance of financial statements and practices.
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