(i) State whether you agree or disagree with thefollowing statementExplain what happens to (ii) MS and (iii) interestratesWhen the real economy expands (Y rises), thedemand for money expands. As a result,households hold more cash and the supply ofmoney expands.Agree or DisagreeImpact on MSImpact on Interest rateChoose...Choose...Choose...(▶►Choose...remain unchangeddecreaseDisagreeAgreeincrease How will each of the following scenariosimpact the market for moneyA reduction in the minimum percentage of theirdeposits that commercial banks are required tohold as cash reserves at the same time as theprice level falls.Impact onsupply ofmoneyImpact onequilibriuminterestrateChoose...Impact ondemandfor moneyChoose...Impact onquantity of Choose...moneyChoose...Choose...equilibrium interest rateunchangedshift inwards / to the leftincrease equilibrium interestrateequilibrium quantity of moneyunchangedincrease equilibrium quantity ofmoneydecrease equilibrium quantity ofmoneydecrease equilibrium interestrateshift outwards / to the rightmovement along the curve

Since you have asked multiple question, we will answer first question for you. If you want any…

plain what happens to (ii) MS and (iii) interest tes hen the real economy expands (Y rises), the emand for money expands. As a result, ouseholds hold more cash and the supply of oney expands. gree or Disagree mpact on MS Choose... Choose... remain unchanged decrease Disagree Agree O O O

plain what happens to (ii) MS and (iii) interest tes hen the real economy expands (Y rises), the emand for money expands. As a result, ouseholds hold more cash and the supply of oney expands. gree or Disagree mpact on MS Choose... Choose... remain unchanged decrease Disagree Agree O O O

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 13P

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Question

(i) State whether you agree or disagree with the
following statement
Explain what happens to (ii) MS and (iii) interest
rates
When the real economy expands (Y rises), the
demand for money expands. As a result,
households hold more cash and the supply of
money expands.
Agree or Disagree
Impact on MS
Impact on Interest rate
Choose...
Choose...
Choose...
(▶►
Choose...
remain unchanged
decrease
Disagree
Agree
increase

How will each of the following scenarios
impact the market for money
A reduction in the minimum percentage of their
deposits that commercial banks are required to
hold as cash reserves at the same time as the
price level falls.
Impact on
supply of
money
Impact on
equilibrium
interest
rate
Choose...
Impact on
demand
for money
Choose...
Impact on
quantity of Choose...
money
Choose...
Choose...
equilibrium interest rate
unchanged
shift inwards / to the left
increase equilibrium interest
rate
equilibrium quantity of money
unchanged
increase equilibrium quantity of
money
decrease equilibrium quantity of
money
decrease equilibrium interest
rate
shift outwards / to the right
movement along the curve

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