Suppose the Federal Reserve has set the money supply at $10 million. The table below shows the interest rate and total demand for money. Interest Rate Demand (in millions) 20% $2 15 4 10 6 5 8 0 10   What is the equilibrium interest rate?   Multiple Choice   20 percent   15 percent   0 percent   5 percent

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Money And The Banking System
Section: Chapter Questions
Problem 3CQ
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Suppose the Federal Reserve has set the money supply at $10 million. The table below shows the interest rate and total demand for money.

Interest Rate Demand (in millions)
20% $2
15 4
10 6
5 8
0 10

 

What is the equilibrium interest rate?

 

Multiple Choice
  •  
    20 percent
  •  
    15 percent
  •  
    0 percent
  •  
    5 percent
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