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For transactions, households and businesses want to hold an amount of money equal to one-half of nominal GDP. The table shows the amounts of money
For transactions, households and businesses want to hold an amount of money equal to one-half of nominal GDP. The table shows the amounts of money they want to hold as an asset at various interest rates.If nominal GDP is $300 and the supply of money is $190, the equilibrium interest rate will be
Interest Rate Amount of Money Demanded as an Asset
10% $20
8 40
6 60
4 80
2 100
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