Answer the Question on the Basis of the Following Information

question 78

Multiple Choice

Answer the question on the basis of the following information.For transactions,households and businesses want to hold an amount of money equal to one-half of nominal GDP.The table shows the amounts of money they want to hold as an asset at various interest rates. $\begin{array}{l}\begin{array}{cc}\underline{\text { Interest Rate} } & \underline{\text { Amount of Money Demanded }}\\10 \% & \$ 20 \\8 & 40 \\6 & 60 \\4 & 80 \\2 & 100\end{array}\end{array}$ Refer to the given information.If nominal GDP is $200 and the interest rate is 6 percent,the total amount of money that households and businesses will want to hold is:

• A) $120.
• B) $140.
• C) $160.
• D) $180.

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Definitions:

Liquidated

The process of closing a business by selling off assets to pay creditors and distributing any remaining assets to the owners or shareholders.

Involuntary Bankruptcy

A legal process initiated by creditors seeking to collect debts from a company or individual that cannot pay its obligations.

Petition Filed

The act of formally submitting a document to a court or official body requesting a legal action or judgment.

Bankruptcy Petition

A legal document filed by an individual or business entity declaring inability to meet financial obligations to creditors, seeking relief through bankruptcy proceedings.