The spreadsheet provides information about the demand for money in Minland. Column A is the nominal interest rate, r. Columns B and C show the quantity of money demanded at two values of real GDP: Y0 is $10 billion and Y1 is $20 billion. The quantity of money supplied is $3 billion. Initially, real GDP is $20 billion.
What happens in Minland if the interest rate
(i) Exceeds 4 percent a year and
(ii) Is less than 4 percent a year?

Transcribed Image Text:

15050505 0505050 h1122334 1.0 1.5 2.0 B Ar 7654321 I 2345678