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Assume That the Money Demand Function Is (M/P)d = 2,200

Question 84

Multiple Choice

Assume that the money demand function is (M/P) d = 2,200 - 200r, where r is the interest rate in percent. The money supply M is 2,000 and the price level P is 2. The equilibrium interest rate is ______ percent.


A) 2
B) 4
C) 6
D) 8

Correct Answer:

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