Assume That the Money Demand Function Is (M/P)d = 2,200

question 38

Multiple Choice

Assume that the money demand function is (M/P) d = 2,200 - 200r, where r is the interest rate in percent. The money supply M is 2,000 and the price level P is 2. The equilibrium interest rate is
Percent.

• A)2
• B)4
• C)6
• D)8

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Definitions:

Stop Payment Order

A stop payment order is a request made to a bank or financial institution to cancel a check or payment before it is processed or cashed.

Holder In Due Course

A party possessing a negotiable instrument, such as a check or promissory note, who has certain rights to payment and is protected against some defenses if the instrument was acquired in good faith.

Authorized Representative

An individual or entity legally empowered to act on behalf of another person or organization.

Legal Entity

A legal entity refers to any company or organization that has legal rights and obligations, including the capacity to enter into contracts and loans, sue and be sued.