The demand for money is given by Md = $Y (0.3 - i), where $Y = 100 and the supply of money is $20. What is the equilibrium interest rate? What is the impact on the interest rate if central bank money is increased to $25?
The demand for money is given by Md = $Y (0.3 - i), where $Y = 100 and the supply of money is $20. What is the equilibrium interest rate? What is the impact on the interest rate if central bank money is increased to $25?
Chapter14: Money And The Economy
Section: Chapter Questions
Problem 14QP
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The demand for money is given by Md = $Y (0.3 - i), where $Y = 100 and the supply of money is $20.
- What is the equilibrium interest rate?
- What is the impact on the interest rate if central bank money is increased to $25?
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