The following table describes money demand and supply at different levels of interest rate:

Interest rate Transaction demand

Dt Asset demand

Da Sm1 Sm2 Sm3

5% 400 1320 1500 1720 1280

6% 400 1100 1500 1720 1280

7% 400 880 1500 1720 1280

8% 400 660 1500 1720 1280

A. At money supply level of $ 1500, what is the equilibrium interest rate?

Answer for part 1

% [Write the number without %]

B. If the central bank decided to change the money supply to 1280, what will be the equilibrium interest rate?

Answer for part 2

% [Write the number without %]

C. Assume the monetary multiplier is 8. The central bank desires to decrease the money supply from 1500 to 1280, how much of government securities should the central bank sell?

$ Answer for part 3

billion [Round your answer to the nearest two digits]

D. At interest level 8% and money supply of $ 1500 billion, how much would be the surplus in the money market?

$ Answer for part 4

billion [In absolute value].