4. Suppose demand for real money balance is = 500 + 0.2Y – 1000i. P If P = 10, Y= 1000, and I = 0.10, and the money market is in equilibrium, What is the equilibrium stock of nominal money? What is the velocity of money? Suppose there is an autonomous increase in money demand by 100, with a constant nominal money supply, P = 10, and Y= 1000, what is the equilibrium i? If the central bank wishes to maintain i = 0.10, what must the nominal money supply be? Draw and label completely a money market equilibrium diagram. Label equilibrium M/P and i with their actual values. Draw and carefully label the changes that result from (c) and (d) above. а. b. с. d. е.

4. Suppose demand for real money balance is = 500 + 0.2Y – 1000i. P If P = 10, Y= 1000, and I = 0.10, and the money market is in equilibrium, What is the equilibrium stock of nominal money? What is the velocity of money? Suppose there is an autonomous increase in money demand by 100, with a constant nominal money supply, P = 10, and Y= 1000, what is the equilibrium i? If the central bank wishes to maintain i = 0.10, what must the nominal money supply be? Draw and label completely a money market equilibrium diagram. Label equilibrium M/P and i with their actual values. Draw and carefully label the changes that result from (c) and (d) above. а. b. с. d. е.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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