Business, 21.07.2020 19:01 errr5529

Assume that the following data characterize the hypothetical economy of Trance: money supply = $200 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. a. What is the equilibrium interest rate in Trance? percent.
b. At the equilibrium interest rate, what is the quantity of money supplied, the money demanded, the amount of money demanded for transaction, and the amount of money demanded as an asset in trace?
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

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Assume that the following data characterize the hypothetical economy of Trance: money supply = $200...

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