Consider the Following Table -These Data Suggest That the Amount of Money That Society

question 32

Multiple Choice

Consider the following table

$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Interest rate } \\( \% ) \end{array} & \begin{array} { c } \text { Transaction demand } \\\text { for money }\end{array} & \begin{array} { c } \text { Asset demand } \\\text { for money }\end{array} \\\hline 12 & \$ 100 & \$ 0 \\\hline 10 & 100 & 20 \\\hline 8 & 100 & 40 \\\hline 6 & 100 & 60 \\\hline 4 & 100 & 80 \\\hline 2 & 100 & 100 \\\hline\end{array}$
-These data suggest that the amount of money that society wishes to hold as an asset:

• A)varies directly with the interest rate
• B)varies inversely with the interest rate
• C)varies inversely with real output
• D)is independent of the interest rate
• E)varies directly with the amount of money demanded for transactions purposes

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