Exhibit 4 Interest Rate Amount of Money Demanded Asset $20 40 60 80 100 as an 10% 4 4. Refer to Exhibit 4. 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 $230, the equilibrium interest rate will be. a) 2 percent. b) 4 percent. c) 6 percent. d) 8 percent.

Exhibit 4 Interest Rate Amount of Money Demanded Asset $20 40 60 80 100 as an 10% 4 4. Refer to Exhibit 4. 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 $230, the equilibrium interest rate will be. a) 2 percent. b) 4 percent. c) 6 percent. d) 8 percent.

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 23CTQ: Given the federal budget deficit in recent years, some economists have argued mat by adjusting...

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Question

Exhibit 4
Interest Rate Amount of Money
Demanded
Asset
$20
40
60
80
100
as
an
10%
8
2
34. Refer to Exhibit 4. 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 $230, the
equilibrium interest rate will be.
a)
2 percent.
4
b)
c)
percent.
6 percent.
d)
8 percent.

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