Answer the Question Based on the Information in the Table

question 97

Multiple Choice

$$\begin{array} { | c | c | c | c | } \hline \text { Money Supply } & \text { Money Demand } & \text { Interest Rate } & \begin{array} { c } \text { Investment (at Interest } \\\text { Rate Shown) }\end{array} \\\hline \$ 400 & \$ 600 & 2 \% & \$ 700 \\\hline \$ 400 & 500 & 3 & 600 \\\hline \$ 400 & 400 & 4 & 500 \\\hline \$ 400 & 300 & 5 & 300 \\\hline \$ 400 & 200 & 6 & 200 \\\hline\end{array}$$ Answer the question based on the information in the table. The equilibrium interest rate in this economy is

• A) 3 percent.
• B) 4 percent.
• C) 5 percent.
• D) 6 percent.

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Definitions:

Lubrication Cost

Expenses associated with the lubrication of machinery and equipment to ensure smooth operation and reduce wear and tear.

Net Operating Income

Income originating from a corporation's central business endeavors, excluding subtractions for interest and taxes.

Variable Component

A portion of a cost or expense that varies directly with changes in production volume, business activity, or other variables.

Least-Squares Regression

A statistical method used to determine a line of best fit by minimizing the sum of the squares of the differences between observed values and those predicted by the model.