Interest Rate % Money Demand (billions of dollars) 17 180 16 200 15 220 14 240 13 280 12 340 11 400 10 480 9 580 Assume that the money supply is equal to 240 Part 1: What is the equilibrium rate of interest? Part 2: Assume that the Bank of Canada buys bonds and increases the money supply to 400 What is the equilibrium rate of interest 2 Part 3: A fall in income causes the demand for money to If the money supply is 160, what is the equilibrium rate of interest 2 Part 5: An increase in income causes the transaction demand for money to billion at each interest rate. Given a money supply of 240, what is the equilibrium rate of interest? by 60 billion. by 40