(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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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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