Use the Table Below to Answer the Questions

question 11

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:

Western Conceptions

Ideas, philosophies, and understandings that have their origins or are primarily developed and accepted in the Western world, encompassing views on society, ethics, governance, and more.

Karl Marx

A 19th-century philosopher, economist, and revolutionary socialist known for his critique of capitalism and development of historical materialism.

Opium of the People

A term coined by Karl Marx, referring to religion as something that provides comfort to the oppressed masses with an illusion of happiness, pacifying them and detracting from actual worldly sufferings.

Transcendent

Going beyond the limits of ordinary experience, this term refers to something that is above and beyond the material universe.