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What is the equilibrium interest rate in trance

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Reference no: EM133336522

Question: Assume that the following data characterize the hypothetical economy of Trance: money supply = $190 billion; quantity of money demanded for transactions = $160 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fall in the interest rate.

Instructions: Enter your answers as a whole number.

a. What is the equilibrium interest rate in Trance?

percent

b. At the equilibrium interest rate, what are the quantity of money supplied, the quantity of money demanded, the amount of money demanded for transactions, and the amount of money demanded as an asset in Trance?

Quantity of money supplied = $ billion

Quantity of money demanded = $ billion

Amount of money demanded for transactions = $ billion

Amount of money demanded as an asset = $ billion

 

Reference no: EM133336522

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