(d) The table below shows the asset demand at certain rates of interest. Given that thetransaction demand is $1,500 billion.(i) Complete the table to show the total demand for money at various rates ofinterest.Interest rateAsset demandTotal demand(in %)(S billions)(S billions)101401802204360(iii)If the money supply rises, analyse whether the equilibrium rate of interestrises or falls.(iv) If GDP rises, analyse whether the equilibrium rate of interest rises or falls.

Given, Transaction demand = $1,500 billion Interest rate (in %) Asset demand ($ billions)…

(d) The table below shows the asset demand at certain rates of interest. Given that the transaction demand is $1,500 billion. (i) Complete the table to show the total demand for money at various rates of interest. Interest rate Asset demand Total demand (in %) 10 (S billions) 140 (S billions) 8 180 220 4 360

(d) The table below shows the asset demand at certain rates of interest. Given that the transaction demand is $1,500 billion. (i) Complete the table to show the total demand for money at various rates of interest. Interest rate Asset demand Total demand (in %) 10 (S billions) 140 (S billions) 8 180 220 4 360

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 7SCQ: Go to this website (http://www.measuringworth.com/ppowerus/) for the Purchasing Power Calculator at...

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Question

(d) The table below shows the asset demand at certain rates of interest. Given that the
transaction demand is $1,500 billion.
(i) Complete the table to show the total demand for money at various rates of
interest.
Interest rate
Asset demand
Total demand
(in %)
(S billions)
(S billions)
10
140
180
220
4
360
(iii)
If the money supply rises, analyse whether the equilibrium rate of interest
rises or falls.
(iv) If GDP rises, analyse whether the equilibrium rate of interest rises or falls.

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