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Homework answers / question archive / Assume that the following data characterize a hypothetical economy: money supply = $150 billion; quantity of money demanded for transactions = $95 billion; quantity of money demanded as an asset = $15 billion at 12 percent interest, increasing by $10 billion for each 2-percentage point fall in the interest rate

Assume that the following data characterize a hypothetical economy: money supply = $150 billion; quantity of money demanded for transactions = $95 billion; quantity of money demanded as an asset = $15 billion at 12 percent interest, increasing by $10 billion for each 2-percentage point fall in the interest rate

Economics

Assume that the following data characterize a hypothetical economy: money supply = $150 billion; quantity of money demanded for transactions = $95 billion; quantity of money demanded as an asset = $15 billion at 12 percent interest, increasing by $10 billion for each 2-percentage point fall in the interest rate. 
a) What is the equilibrium interest rate? Equilibrium interest rate = I b) At the equilibrium interest rate, what is the quantity of money supplied? 
'Money supplied = al billion I 
0) At the equilibrium interest rate, what is the total quantity of money demanded? 
'Money demanded = al billion I 
d) At the equilibrium interest rate, what is the quantity of money demanded for transactions? 'Money demanded for transactions = $0 billion ] a) At the equilibrium interest rate, what is the quantity of money demanded as an asset? 'Money demanded as an asset = $0 billion ] 

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