et = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fa rest rate. ructions: Enter your answers as a whole number. 'hat is the equilibrium interest rate in Trance? |percent t the equilibrium interest rate, what are the quantity of money supplied, the quantity of mone anded, the amount of money demanded for transactions, and the amount of money demane et in Trance? Quantity of money supplied = $| | billion Quantity of money demanded = $| | billion amount of money demanded for transactions = $ | | billion

et = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fa rest rate. ructions: Enter your answers as a whole number. 'hat is the equilibrium interest rate in Trance? |percent t the equilibrium interest rate, what are the quantity of money supplied, the quantity of mone anded, the amount of money demanded for transactions, and the amount of money demane et in Trance? Quantity of money supplied = $| | billion Quantity of money demanded = $| | billion amount of money demanded for transactions = $ | | billion

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

Assume that the following data characterize the hypothetical economy of Trance: money supply = $210
billion; quantity of money demanded for transactions = $150 billion; quantity of money demanded as an
asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fall in the
interest rate.
Instructions: Enter your answers as a whole number.
a. What is the equilibrium interest rate in Trance?
|percent
b. At the equilibrium interest rate, what are the quantity of money supplied, the quantity of money
demanded, the amount of money demanded for transactions, and the amount of money demanded as an
asset in Trance?
Quantity of money supplied = $
| billion
Quantity of money demanded = $
billion
Amount of money demanded for transactions = $
billion
Amount of money demanded as an asset = $
billion

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