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Type your question here Money and interest rate Project Use the graph below to a

ID: 2367759 • Letter: T

Question

Type your question here

Money and interest rate Project Use the graph below to answer the following questions. is the transactions demand for money, D is the total demand for money, and is the supply of money. What is the transaction demand for money in the market? What is the assert demand for money if the interest rate is 4 %? If the money market is in equilibrium at 6%, describe the change that must occur for the equilibrium rate to change to 4%. If the money market is in equilibrium at 6% and the money supply has increased to Sm3, by how much total demand for money changed? (you may also review parts of week 5 readings)

Explanation / Answer

(a) $125 (b) $325