Thank you for answering my questions. I am very appreciating your help
AutoSave . OFF "TUT%20Macro%20Unit%207%20%28May%202020%29-converted - Compatibility Mode Q Home Insert Draw Design Layout References Mailings Review View Table Design Layout . Tell me Share Comments Carlito * 11 " A" A Aa Po 24 T AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe Paste BI Uvab X x A LA Normal Body Text List Paragraph No Spacing Table Paragr... Heading 1 Styles Dictate Sensitivity Pane 131 1 1 2 , 1 10 11 12 13 14 15 1 16, 17 5. The total demand for money is equal to the transactions demand plus the asset demand for money. (a) Assume that each dollar held for transactions purposes is spent on the average five times per year to buy final goods and services. If the nominal GDP is $5000 billion ($5 trillion), what is the transaction demand? (b) The table below shows the asset demand at certain rates of interest. Using your answer to part (a), complete the table to show the total demand for money at various rates ofinterest. Interest Asset Total rate demand demand (in %) (billions) (billions) 10 $ 40 $ 8 80 6 120 4 160 (c) If the money supply is $1,080 billion, what will be the equilibrium rate of interest? (d) If the money supply rises, will the equilibrium rate of interest rise or fall? (e) If GDP rises, will the equilibrium rate of interest rise or fall? Page 2 of 6 1556 words English (United States) Focus E + 173%AutoSave . OFF "TUT%20Macro%20Unit%207%20%28May%202020%29-converted - Compatibility Mode Q Home Insert Draw Design Layout References Mailings Review View Table Design Layout . Tell me Share Comments Carlito * 11 " A" A Aa Po AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe Paste BI UvabX x A LA Normal Body Text List Paragraph No Spacing Table Paragr... Heading 1 Styles Dictate Sensitivity Pane 10 11 12 13 14 15 16 1 17 6. Use the graph below to answer the following questions. D, is the transactions demand for money, Dm is the total demand for money, and S is the supply of money Sym Sm2 Sma 00 Rate of interest 4 De ,Dm 125 175 250 325 Quantity of money (a) What is the transactions demand for money in this market? (b) What is the asset demand for money if the interest rate is 4%? (c) If the money market is in equilibrium at 6%, describe the change that must occur for the equilibrium rate to change to 4%. (d) If the money market is in equilibrium at 6% and the money supply has increased to Sma, by how much has total demand for money changed? 7. Explain how the money market responds to a shortage of money or to a surplus of money. Page 2 of 6 1556 words s x English (United States) Focus E + 125%
