Answer the Question on the Basis of the Following Table

question 216

Multiple Choice

Answer the question on the basis of the following table: $\begin{array}{c}\begin{array}{c}\\\text { Interest }\\\text { Rate } \\\hline 2 \% \\4 \\6 \\8 \\10 \end{array}\begin{array}{c}\text {Transaction}\\\text {Demand for}\\\underline{\text {Money}}\\ \$ 220 \\220\\220\\220\\220\end{array}\begin{array}{c}\\\text {Asset Demand }\\\underline{\text {for Money}}\\\$ 300 \\280 \\260 \\240 \\220\end{array}\begin{array}{c}\\\text {Money}\\\underline{\text {Supply}}\\\$ 460 \\460\\460\\460\\460\end{array}\end{array}$

Refer to the given table.An increase in the money supply of $20 billion will cause the equilibrium interest rate to:

• A) fall by 4 percentage points.
• B) fall by 2 percentage points.
• C) rise by 4 percentage points.
• D) rise by 2 percentage points.

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Definitions:

Gross Margin Ratio

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company's core activities.