Solved

Refer to the Table

Question 188

Multiple Choice

 Interest Rate  Asset Demand for Money (Billions)  7%$200630054004500\begin{array} { | c | c | } \hline \text { Interest Rate } & \text { Asset Demand for Money (Billions) } \\\hline 7 \% & \$ 200 \\\hline 6 & 300 \\\hline 5 & 400 \\\hline 4 & 500 \\\hline\end{array} Refer to the table. Suppose that the transactions demand for money is $300 billion and the money supply is $700 billion. A decrease in the money supply to $600 billion would cause the interest rate to


A) rise to 7 percent.
B) rise to 6 percent.
C) fall to 4 percent.
D) fall to 5 percent.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions