2. Suppose that Md = –80i + 0.7Y and that BSP fixes Ms at Php50 B and the national income is to be achieved at P80B. A. Determine the equilibrium interest rate and equilibrium quantity of money that is desirable so as not to cause any surplus or shortage of money. Show supporting calculation. B. Illustrate in a graph the money demand and supply and highlight the equilibrium point.
2. Suppose that Md = –80i + 0.7Y and that BSP fixes Ms at Php50 B and the national income is to be achieved at P80B. A. Determine the equilibrium interest rate and equilibrium quantity of money that is desirable so as not to cause any surplus or shortage of money. Show supporting calculation. B. Illustrate in a graph the money demand and supply and highlight the equilibrium point.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. Suppose that Md = –80i + 0.7Y and that BSP fixes Ms at Php50 B and the
income
A. Determine the equilibrium interest rate and equilibrium quantity of money that is
desirable so as not to cause any surplus or shortage of money. Show supporting
calculation.
B. Illustrate in a graph the money demand and supply and highlight the equilibrium
point.
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