Assume that the economy’s real GDP is growing. What will happen to money demand over time? If the Fed leaves the money supply unchanged, what will hap- pen to the interest rate over time? If the Fed changes the money supply to match the change in money demand, what will happen to the interest rate over time?

Assume that the economy’s real GDP is growing. What will happen to money demand over time? If the Fed leaves the money supply unchanged, what will hap- pen to the interest rate over time? If the Fed changes the money supply to match the change in money demand, what will happen to the interest rate over time?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter15: Monetary Theory And Policy

Section: Chapter Questions

Problem 2.5P

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