Using the data in the table below, answer the following questions. (Hint: draw a graph when possible) Interest Rate% Mon

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Using the data in the table below, answer the following
questions. (Hint: draw a graph when possible)
Interest Rate%
Money Demand
(billions of dollars)
10
120
9
140
8
160
7
180
6
220
5
280
4
340
3
420
2
520
Assume that the money supply is equal to 180 (do
not use % signs in your answers)
Part 1: What is the equilibrium rate of
interest?
Part 2: Assume that the Bank of Canada buys bonds and increases
the money supply to 340 What is the equilibrium rate of
interest?
Part 3: A fall in income causes the demand for money
to
decreaseincreaseno changeClick for List by 60 billion.
If the money supply is 100, what is the equilibrium rate of
interest?
Part 4: Assuming the change in part 3, if money supply is 360,
what is the equilibrium rate of interest?
Part 5: An increase in income causes the transaction demand for
money to no
changedecreaseincreaseClick for List by 40 billion at each
interest rate. (Assume the change in part 3 did not occur. Given a
money supply of 180, what is the equilibrium rate of
interest?
Part 6: Given the change in part 5, if money supply is 320, what
is the equilibrium rate of interest?