Interest-The Money Market Exercise 2 The table below depicts transaction demand for money (D and asset demand for money (D Money Market Interest Rate (percent) Da Dt $200 200 200 $600 500 400 300 200 100 54 8. 200 200 200 10 Suppose the money supply in the market is $600. a. If interest rates are 9%, how would you describe the money market? The demand for money is greater than the supply of money and interest rates will rise. The demand for money is less than the supply of money and interest rates will fall. O The demand for money is less than the supply of money and interest rates will rise. O The demand for money is greater than the supply of money ond interest rates will fall. The market is in equilibrium. b. If interest rates are 7%, how would you describe the money market? O The demand for money is greater than the supply of money and interest rates will fall. O The demand for money is greater than the supply of money and interest rates will rise. O The demand for money is less than the supply of money annterest rates will fall, The market is in equilibrium. O The demand for money is less than the supply of money and interest rates will rise. CH interest rates are 5%, how would you describe the money market? OThe market is in equilibrium The demand for money is greater than the supply of money and interest rates will rise. O The demand for money is less than the supply of money and interest rates will fal The demand for maney is less than the supply of money and interest rates will rise.
Interest-The Money Market Exercise 2 The table below depicts transaction demand for money (D and asset demand for money (D Money Market Interest Rate (percent) Da Dt $200 200 200 $600 500 400 300 200 100 54 8. 200 200 200 10 Suppose the money supply in the market is $600. a. If interest rates are 9%, how would you describe the money market? The demand for money is greater than the supply of money and interest rates will rise. The demand for money is less than the supply of money and interest rates will fall. O The demand for money is less than the supply of money and interest rates will rise. O The demand for money is greater than the supply of money ond interest rates will fall. The market is in equilibrium. b. If interest rates are 7%, how would you describe the money market? O The demand for money is greater than the supply of money and interest rates will fall. O The demand for money is greater than the supply of money and interest rates will rise. O The demand for money is less than the supply of money annterest rates will fall, The market is in equilibrium. O The demand for money is less than the supply of money and interest rates will rise. CH interest rates are 5%, how would you describe the money market? OThe market is in equilibrium The demand for money is greater than the supply of money and interest rates will rise. O The demand for money is less than the supply of money and interest rates will fal The demand for maney is less than the supply of money and interest rates will rise.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Interest-The Money Market Exercise 2
The table below depicts transaction demand for money (D and asset demand for money (D
Money Market
Da
Interest Rate (percent)
54
6.
Dt
$200
200
200
$600
se
400
300
200
100
8.
200
200
200
10
Suppose the money supply in the market is $600.
a. If interest rates are 9%, how would you describe the money market?
The demand for money is greater than the supply of money and interest rates will rise.
The demand for money is less than the supply of money and interest rates will fall.
O The demand for money is less than the supply of money and interest rates will rise.
O The demand for money is greater than the supply of money ond interest rates will fall.
The market is in equilibrium.
b. If interest rates are 7%, how would you describe the money market?
O The demand for money is greater than the supply of money and interest rates will fall.
O The demand for money is greater than the supply of money and interest rates will rise.
O The demand for money is less than the supply of money annterest rates will fall.
The market is in equilibrium.
O The demand for money is less than the supply of money and interest rates will rise.
CH interest rates are 5%, how would you describe the money market?
The market is in equilibrium
The demand for money is greater than the supply of money and interest rates will rise.
O The demand for money is less than the supply of money and interest rates will fall
The demand for maney is less than the supply of money and interest rates will rise.
O The demand for money is greater than the supply of money and interest rates will fall
OOC
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