Answer the Question on the Basis of the Following Table

question 138

Multiple Choice

Answer the question on the basis of the following table in which columns (1) and (2) indicate the transactions demand (D_t) for money and columns (1) and (3) show the asset demand (D_a) for money: $\begin{array}{c}\begin{array}{c}(1) \\\underline{\text {Interest Rate}}\\12 \% \\10 \\8 \\6 \\4 \\2\end{array}\begin{array}{c}(2) \\\underline{D_{t} }\\ \$ 100 \\100 \\100 \\100 \\100 \\100\end{array}\begin{array}{c}(3) \\\underline{D_{a}} \\\$ 0 \\20 \\40 \\60 \\80 \\100\end{array}\end{array}$
The given 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 nominal GDP.
• D) is independent of the interest rate.

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