Use the following data that describe market conditions to answer two questions. Money supply (in billions) Interest rate $100 $200 $300 $400 $500 $600 $700 4.0% Rate of investment (in billions) 3.5% $15 $15 $18 3.0% 2.5% 2.0% 1.5% 1.5% $19 $19.5 $19.5 $19.5 Instructions: Enter your responses as a percentage rounded to one decimal place. a. At what rate of interest does the liquidity trap emerge? % b. At what rate of interest does investment demand become totally inelastic? %

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
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Use the following data that describe market conditions to answer two questions.
Money supply (in billions)
Interest rate
$100
$200
$300
$400
$500 $600 $700
4.0%
Rate of investment (in billions)
3.5%
$15 $15 $18
3.0%
2.5%
2.0% 1.5% 1.5%
$19 $19.5 $19.5 $19.5
Instructions: Enter your responses as a percentage rounded to one decimal place.
a. At what rate of interest does the liquidity trap emerge?
%
b. At what rate of interest does investment demand become totally inelastic?
%
Transcribed Image Text:Use the following data that describe market conditions to answer two questions. Money supply (in billions) Interest rate $100 $200 $300 $400 $500 $600 $700 4.0% Rate of investment (in billions) 3.5% $15 $15 $18 3.0% 2.5% 2.0% 1.5% 1.5% $19 $19.5 $19.5 $19.5 Instructions: Enter your responses as a percentage rounded to one decimal place. a. At what rate of interest does the liquidity trap emerge? % b. At what rate of interest does investment demand become totally inelastic? %
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