Answered

Welcome to Westonci.ca, the place where your questions find answers from a community of knowledgeable experts. Get immediate and reliable answers to your questions from a community of experienced experts on our platform. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

If the supply of real balances is 300, and the gross domestic product is 90, then the equilibrium interest rate is

Sagot :

Baraq

Suppose that the demand for real balances is (M / P)d = (5Y) - (20r). If the supply of real balances is 300, and the gross domestic product is 90, then the equilibrium interest rate is

Answer:

7.5

Explanation:

Given that (M / P)d = (5Y) - (20r).

Where supply of real balances is 300

The gross domestic product is 90

Hence we have 300 = (5Y) - (20r)

Therefore, we have 300 = (5×90) - (20r)

=> 300 = 450 - 20r

=> 20r = 450 - 300

=> 20r = 150

=> r = 150 ÷ 20

=> r = 7.5

Therefore, in this case, the correct answer to the question is that the equilibrium interest rate is 7.5

Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.