The Above Table Has the Demand and Supply Schedules for of }&\text

question 115

Multiple Choice

$\begin{array} { c c c } \hline &\text { Quantity of }&\text { Quantity of }\\\text { Nominal interest rate }&\text { money demanded }&\text { money supplied }\\\text { (percent per year) }&\text { (trillions of dollars) }&\text { (trillions of dollars) }\\\hline 5 & 2.9 & 2.5 \\6 & 2.8 & 2.5 \\7 & 2.7 & 2.5 \\8 & 2.6 & 2.5 \\9 & 2.5 & 2.5 \\10 & 2.4 & 2.5 \\\hline\end{array}$
The above table has the demand and supply schedules for money
- If the Fed increases the quantity of money by $0.1 trillion, the new equilibrium nominal interest rate is

• A)9 percent.
• B)5 percent.
• C)8 percent.
• D)6 percent.
• E)7 percent.

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