1. 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. if the price level is fixed and the supply of money is raised to 2,800, then the equilibrium interest rate will:

r= 3

Explanation:

Due that the level price does not changed, the first thing that you have to do to find the equilibrium is put the two equations with an equal

Money demand =Supply of money

2,200 – 200 r= 2,000

Now you have to find the value of r and you have to clear the formula and first you have to:

2,800- 2,200 = 200r

Now that you have the number together you have to apply the operation

600 = 200r

As the 200 is multiplying the r you have to pass the 200 to divided the 600

r= (600/200)

r= 3%

The interest rate is 3%

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