Assume that the following data characterize a hypothetical economy: money supply = $150 billion; quantity of money demanded for transactions = $120 billion; quantity of money demanded as an asset = $20 billion at 8 percent interest, increasing by $5 billion for each 2-percentage point fall in the interest rate.

a)What is the equilibrium interest rate?

Equilibrium interest rate =

0

%

b)At the equilibrium interest rate, what is the quantity of money supplied?

Money supplied = $

150

billion

c)At the equilibrium interest rate, what is the total quantity of money demanded?

Money demanded = $

140

billion

d)At the equilibrium interest rate, what is the quantity of money demanded for transactions?

Money demanded for transactions = $

120

billion

e)At the equilibrium interest rate, what is the quantity of money demanded as an asset?

Money demanded as an asset = $

20

billion

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