The Demand and Supply of Capital Are Given by Q^D

question 49

Multiple Choice

The demand and supply of capital are given by Q^D = 50 - 8r and Q^S = 4r - 10, where Q is the quantity of capital in millions of dollars and r is the interest rate measured as a percentage. What is the equilibrium quantity of capital?

• A) $5 million
• B) $60 million
• C) $10 million
• D) $12 million

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