Use the hypothetical money demand curve below to answer the questions.. Use the

Question

Use the hypothetical money demand curve below to answer the questions..

Use the hypothetical money demand curve below to answer the questions. What is the quantity of money demanded when the interest rate is 6 percent What is at 8 percent? Choose the answer that best explains the relationship between the quantity of money demanded and the interest rate on bonds. If interest rates increase money demand falls If interest rates increase money demand increases. If interest rates increase the quantity of money demanded increases. If interest rates increase the quantity of money demanded decreases.

Explanation / Answer

1) At 6% interest arte $40 billion money quantity demanded and at 8% interest rate $20 billion quantity demanded.

2) if interest rate increase the quantity of money demanded decreases.

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