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.

---

Definitions:

Hydrogen Fuel Source

An energy source that uses hydrogen gas as a clean alternative to fossil fuels, producing water as the main byproduct when used in fuel cells.

Metal-Hydrogen Compounds

These are chemical compounds that consist of metal elements bonded with hydrogen, playing crucial roles in fields like energy storage and catalysis.

Experimental Cars

Vehicles designed and built to test new concepts, technologies, and functionalities in automotive engineering.

Air Pollutants

Substances in the air that can cause harm to humans and the environment, including particulates, nitrogen dioxide, sulfur dioxide, and carbon monoxide.