8 points 19 18 Money Demand Interest Rate % (billions of dollars) 180 200 17 220 16 240 15 280 14 340 13 400 12 480 11 580 Assume that the money supply is equal to 240 (do not use % signs in your answers) Part 1: What is the equilibrium rate of interest? 16 Part 2: Assume that the Bank of Canada buys bonds and increases the money supply to 400 What is the equilibrium rate of interest? 13 Part 3: A fall in income causes the demand for money to decrease by 60 billion. If the money supply is 160, what is the equilibrium rate of

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