Assume that the following data characterize a hypothetical economy: money supply $200 billion; quantity of money demanded for transactions $150 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? explain. b. at the equilibrium interest rate, what are the quantity of money supplied, the total quantity of money

A. The interest rate is 4 percent.

B. The amount of money supplied is 200 bilion dollars and the equilibrium quantity demanded is 200 bilion dollars.

Explanation:

A. To answer this questions you use the table below. The first column is the interest rate. The second column is the quantity of money demanded as an asset at each rate. The third column is the quantity of money demanded for transactions, which is independent of the interested rate. The fourth column is the actual (total) quantity of money demanded at each interest rate, which is the sum of columms 1 and 2. The fifth column is the quantity of money supplied at each interest rate. You wil find the equilibrium interest rate by equating the quantity supplied with the quantity demanded, which occurs at the interest rate of 4 percent.

B. It also follows from the answer above that the equilibrium quantity of money supplied is 200 bilion dollars and the equilibrium quantity demanded is 200 bilion dollars. You can decompose the quantity demanded into its separate components, where the amount of money demanded for transactions is 150 billion dollars and the amount of money demanded as an asset is 50 billion dollars.

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported

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