-The Above Table Has the Demand for Money Schedule

Essay

$\begin{array}{|c|c|}\hline\begin{array}{c}\text { Interest rate } \\\text { (percent per year) }\end{array} & \begin{array}{c}\text { Uantity of money } \\\text { demanded (trillions } \\\text { of } 2005 \text { dollars) }\end{array} \\\hline 3 & 2.0 \\\hline 4 & 1.5 \\\hline 5 & 1.0 \\\hline 6 & 0.5 \\\hline\end{array}$
-The above table has the demand for money schedule.
a) If the Fed sets the quantity of money equal to $1.0 trillion, what is the equilibrium interest rate?
b) If the Fed wants the interest rate to be 4 percent, what must it do?