9. The price level and the market for bank reserves The following graph shows the market for bank reserves in a hypothetical economy. Suppose the price level increases from 60 to 110. Shift the appropriate curve on the following graph to show the impact of an increase in the overall price level. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. INTEREST RATE (Percent) 5 0 Supply 40 Demand 10 20 30 50 QUANTITY OF BANK RESERVES (Billions of dollars) 60 Demand Supply (?)

9. The price level and the market for bank reserves The following graph shows the market for bank reserves in a hypothetical economy. Suppose the price level increases from 60 to 110. Shift the appropriate curve on the following graph to show the impact of an increase in the overall price level. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. INTEREST RATE (Percent) 5 0 Supply 40 Demand 10 20 30 50 QUANTITY OF BANK RESERVES (Billions of dollars) 60 Demand Supply (?)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter26: Monetary Policy

Section: Chapter Questions

Problem 2P

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