Suppose that the money demand function is (M/P)d = 1,000 − 100r, where r is the interest rate in percent. The money supply M is 1,000 and the price level P is 2. If the Fed wishes to raise the...

Suppose that the money demand function is

(M/P)d = 1,000 − 100r,

where r is the interest rate in percent. The money supply M is 1,000 and the price level P is 2.

1. 
   If the Fed wishes to raise the interest rate to
   

7 percent, what money supply should it set?