Suppose That the Transactions Demand for Money Is Equal to

question 392

Multiple Choice

$$\begin{array} { | c | c | } \hline \text { Interest Rate } & \text { Asset Demand for Money (Billions) } \\\hline 7 \% & \$ 200 \\\hline 6 & 300 \\\hline 5 & 400 \\\hline 4 & 500 \\\hline\end{array}$$ Suppose that the transactions demand for money is equal to 20 percent of the nominal GDP, the supply of money is $800 billion, and the asset demand for money is that shown in the table. If the nominal GDP is $2,000 billion, the equilibrium interest rate is

• A) 4 percent.
• B) 5 percent.
• C) 6 percent.
• D) 7 percent.

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Definitions:

Fern

A type of non-flowering plant that reproduces via spores and has fronds, commonly found in moist, shaded areas.

Nonvascular Plants

Plants that lack vascular tissue, including xylem and phloem, making them incapable of transporting water and nutrients efficiently.

Archegonium

A female reproductive structure in ferns, mosses, and some conifers, where the egg cell is produced and fertilization occurs.

Eggs

The female reproductive cells of animals, often enclosed in a protective outer shell, from which the offspring develops.