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I am having trouble with this question. Assume that the following data characterize a hypothetical economy: money supply = $150 billion; quantity of money demanded
I am having trouble with this question. Assume that the following data characterize a hypothetical economy: money supply = $150 billion; quantity of money demanded for transactions = $105 billion; quantity of money demanded as an asset = $20 billion at 14 percent interest, increasing by $5 billion for each 2-percentage point fall in the interest rate. They ask what is the equilibrium interest rate?
I am having trouble figuring out how to solve this.
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