Answer the question based on 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. If nominal GDP is $300 and the supply of money is $250, the equilibrium interest rate will be Interest Rate Amount of Money Demanded as an Asset 10% $20 8 40 6 60 4 80 2 100 Multiple Choice 4 percent. 10 percent. 6 percent. 8 percent. 2 percent.

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Chapter1: Making Economics Decisions
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Answer the question based on 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.

If nominal GDP is $300 and the supply of money is $250, the equilibrium interest rate will be

 

Interest Rate Amount of Money Demanded as an Asset
10% $20
8 40
6 60
4 80
2 100

 

 

Multiple Choice
  •  

    4 percent.

  •  

    10 percent.

  •  

    6 percent.

  •  

    8 percent.

  •  

    2 percent.

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