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- Based on the money market model, when real GDP increases, the equilibrium interest rate should Select one: a. increase the same percentage as the money supply increase. b. increase. c. stay the same. d. decrease.Based on the projections of the repurchase rate in the extract above.Explain, with the aid of a graph, the impact of a cut in the interest rate on thedemand for money.Explain the negative impact of hyperinflation phenomenon
- The ________ demand for money arises out of the need to hold money as a medium of exchange.This demand for money is a function of ________. (4 marks)A Precautionary; interest ratesB Transactions; national incomeC Speculative; interest ratesD Precautionary; national incomeDiscuss money supply and inappropriate government polices as causes of economicflatuationsUsuing the Monetary Intertemporal Model explain the equilibrium effects of a decrease in CURRENT capital stock K use graph to show the shifts and explain what happens
- Explain to Wanda how the monetary system works. In particular, describe the various financial institutions’options she has for raising capital for he business. Be certain to explain the advantages and potential disadvantages of each funding method. How could Wanda approach seeking funding for expansion?Calculate the value of money multiplier and total deposit created if initial deposit is of $500 million and the LRR is 10%What are the primary causes and potential socio-economic consequences of hyperinflation on a nation's economy?
- Explain the working of money multiplier with helps of a numerical exampleSuppose that the nominal interest rate is zero; that is, R = 0 . (a) What is the equilibrium quantity of credit card balances? (b) In what sense does the economy run more efficiently with R = 0 than with R > 0 ? (c) Explain your results in parts (a) and (b). Discuss the realism of these predictions.Calculate the value of money multiplier and the total deposit created if the initial amount is $800 million and LRR is 10%.