(Advanced Analysis) Assume the Equation for the Total Demand for Money

question 110

Multiple Choice

(Advanced analysis) Assume the equation for the total demand for money is L = 0.4Y + 80 − 4i, where L is the amount of money demanded, Y is gross domestic product, and i is the interest rate. If gross domestic product is $200 and the interest rate is 10 (percent) ,
What amount of money will society want to hold?

• A) $200
• B) $120
• C) $320
• D) $160

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