Lab 5 Q3

a options: Surplus or shortage

b options: Surplus or shortage

II Question 3 [16 points] The following table shows the economy for the kingdom ofTheta, which is closed. private (no government) economy. Furthermore, suppose the money supply is $140. 0 0 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 a) If the interest rate is 3%, do we have a surplus or shortage of money and by how much? of money of $I n interest rate of 3% and a GDP of $500 do we have a shortage or a surplus of goods and services and by how much? _ of goods and services of 33' c) What are the equilibrium values of GDP and the interest rate? Interest Rate \"/0 GDP = d) If the money supply were to decrease to $130 what are the new equilibrium values of GDP and the interest rate? I% e) If we have a full-employment level of GDP at $550, what must be the level of money supply to produce this level of GDP? Money Supply = $I Interest Rate GDP