money is $150 billion. a. Use the graph below to illustrate the total demand for money and the supply of money. Instructions: Use the tools provided 'Dm' and 'Sm' to draw the total-demand-for-money curve (Dm) and the money supply curve (Sm) on the graph. Rate of interest (percent) 14 12 10 8 10 2 0 50 100 150 200 250 300 350 Amount of money demanded (billions of dollars) b. What is the equilibrium interest rate? percent Tools Dm > Sm ↑

MACROECONOMICS FOR TODAY
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ISBN:9781337613057
Author:Tucker
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Chapter16: Monetary Policy
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CS 21 

Economics 

please answer both a & b 

The asset demand for money 'Da' is shown in the graph below. The transactions demand for money is $50 billion. The supply of
money is $150 billion.
a. Use the graph below to illustrate the total demand for money and the supply of money.
Instructions: Use the tools provided 'Dm' and 'Sm' to draw the total-demand-for-money curve (Dm) and the money supply curve (Sm)
on the graph.
Rate of interest (percent)
14
12
10
8
2
0
50 100 150 200 250 300 350
Amount of money demanded (billions of dollars)
b. What is the equilibrium interest rate?
percent
Tools
Dm
»
Sm
↑
Transcribed Image Text:The asset demand for money 'Da' is shown in the graph below. The transactions demand for money is $50 billion. The supply of money is $150 billion. a. Use the graph below to illustrate the total demand for money and the supply of money. Instructions: Use the tools provided 'Dm' and 'Sm' to draw the total-demand-for-money curve (Dm) and the money supply curve (Sm) on the graph. Rate of interest (percent) 14 12 10 8 2 0 50 100 150 200 250 300 350 Amount of money demanded (billions of dollars) b. What is the equilibrium interest rate? percent Tools Dm » Sm ↑
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