DEMAND FOR MONEY & INTEREST RATE (data followed by regression output)

Time Period

Interest Rate (%)

Money Demand (in billion US $)

1990

34.76

1.679637

1991

19.28

2.325977

1992

15.62

2.815987

1993

18.23

3.52764

1994

19.30

4.255014

1995

59.43

5.068065

1996

36.39

6.543526

1997

22.14

8.542756

1998

26.36

10.97416

1999

23.74

13.73541

2000

16.92

16.56387

2001

12.80

21.4191

2002

8.21

23.37026

2003

7.02

24.93642

2004

7.44

26.79003

2005

9.70

29.1632

2006

7.51

34.25505

2007

7.56

37.82107

2008

8.71

43.19938

2009

7.07

48.0865

2010

5.28

52.32529

2011

4.91

60.84918

2012

4.68

72.7664

2013

4.27

82.50158

2014

3.55

91.59879

2015

3.44

100

2016

4.75

104.7979

2017

7.33

112.5694

2018

8.04

120.444

2019

8.43

123.8285

Sources:

https://data.oecd.org/money/narrow-money-m1.htm

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.598278545

R Square

0.357937217

Adjusted R Square

0.335006404

Standard Error

0.101097498

Observations

30

ANOVA

df

SS

MS

F

Significance F

Regression

1

0.159539494

0.159539494

15.60944249

0.000479288

Residual

28

0.286179718

0.010220704

Total

29

0.445719212

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

0.220851595

0.027378604

8.066576185

8.7713E-09

0.164769067

0.276934123

Money Demand

-0.00186263

0.000471447

-3.950878699

0.000479288

-0.002828347

-0.00089691

Md & Ir theory: (state the law and cite the source or reference)

Md & Ir Equation:

=0.2209 -0.0019MD

Md & Ir Interpretation:

Intercept or a

X variable or b

Conclusion:

What kind of relationship exists between Md & Irin the country of choice - provide justification