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Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869 Exercise 4
Suppose that money demand is given by
M d = $Y (.25 - i )
Where $Y is $100. Also, suppose that the supply of money is $20.
a. What is the equilibrium interest rate
b. If the Federal Reserve Bank wants to increase i by 10 percentage points (e.g., from 2% to 12%), at what level should it set the supply of money
M d = $Y (.25 - i )
Where $Y is $100. Also, suppose that the supply of money is $20.
a. What is the equilibrium interest rate
b. If the Federal Reserve Bank wants to increase i by 10 percentage points (e.g., from 2% to 12%), at what level should it set the supply of money
Explanation
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Verified
(a) Although this problem is asking us t...
Macroeconomics 5th Edition by Olivier Blanchard
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