Notice that household in the UK hold M1 in relation to nominal of about 0.20 in 2015. Suppose thathe function k(i) is well-described by the form k())=0,2/N, where the nominal interest rate per cent, and that the interest rate for shot-term non-money bank deposits (the opportunity cost of holding M1) is 1%. Suppose that in the next few years the nominal interest rate rises to 4%. What is the resulting demand for money (as a fraction of GDP), What is the elasticity of the demand for money measured in terms of the observed change in interest rates?