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The Demand and Supply of Capital Are Given by QD

Question 18

Multiple Choice

The demand and supply of capital are given by QD = 200 - 60r and QS = 20r - 40, where Q is the quantity of capital in millions of dollars and r is the interest rate measured as a percentage. What is the equilibrium interest rate?


A) 5%
B) 2%
C) 8%
D) 3%

Correct Answer:

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