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Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869 Exercise 2
Assume that money demand takes the form 
Where Y = 1,000 and r = 0.1.
a. Assume that, in the short run, e is constant and equal to 25%. Calculate the amount of seignorage for each rate of money growth, AM/M, listed below.
i. 25%
ii. 50%
iii. 75%
b. In the medium run,
Compute the amount of seignorage associated with the three rates of money growth in part (a). Explain why the answers differ from those in part (a).
Where Y = 1,000 and r = 0.1.
a. Assume that, in the short run, e is constant and equal to 25%. Calculate the amount of seignorage for each rate of money growth, AM/M, listed below.
i. 25%
ii. 50%
iii. 75%
b. In the medium run,
Compute the amount of seignorage associated with the three rates of money growth in part (a). Explain why the answers differ from those in part (a).
Explanation
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(a) To calculate the amount of seinorage...
Macroeconomics 5th Edition by Olivier Blanchard
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