Based on the Given Table, an Increase in the Money

question 284

Multiple Choice

$$\begin{array} { | c | c | c | c | } \hline \text { Interest Rate } & \begin{array} { c } \text { Transactions Demand for } \\\text { Money }\end{array} & \text { Asset Demand for Money } & \text { Money Supply } \\\hline 2 \% & \$ 220 & \$ 300 & 4460 \\\hline 4 & 220 & 280 & 460 \\\hline 6 & 220 & 260 & 460 \\\hline 8 & 220 & 240 & 460 \\\hline 10 & 220 & 220 & 460 \\\hline\end{array}$$ Based on the given table, an increase in the money supply of $20 billion will cause the equilibrium interest rate to

• A) fall by 4 percentage points.
• B) fall by 2 percentage points.
• C) rise by 4 percentage points.
• D) rise by 2 percentage points.

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