A standard "money demand" function used by macroeconomists has the form In(m) = Bo + ByIn(GDP) + B2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent per year. Supposed that B, = 2.28 and fz = - 0.09. What is the expected change in m if GDP increases by 1%? The value of m is expected to increase by approximately 2 %. (Round your response to the nearest integer) What is the expected change in m if the interest rate increases from 1% to 6%? The value of m is expected to decrease by approximately 45 %. (Round your response to the nearest integer)

A standard "money demand" function used by macroeconomists has the form In(m) = Bo + ByIn(GDP) + B2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent per year. Supposed that B, = 2.28 and fz = - 0.09. What is the expected change in m if GDP increases by 1%? The value of m is expected to increase by approximately 2 %. (Round your response to the nearest integer) What is the expected change in m if the interest rate increases from 1% to 6%? The value of m is expected to decrease by approximately 45 %. (Round your response to the nearest integer)

Name: A standard "money demand" function used by macroeconomists has the fo
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Description: A standard "money demand" function used by macroeconomists has the formIn(m) = fo + B,In(GDP) + 62R,Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured

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Contingency Table

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Binomial Distribution

Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.

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A standard "money demand" function used by macroeconomists has the form
In(m) = fo + B,In(GDP) + 62R,
Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent
per year. Supposed that B, = 2.28 and B2 = - 0.09.
What is the expected change in m if GDP increases by 1%?
The value of m is expected to increase by approximately 2 %.
(Round your response to the nearest integer)
What is the expected change in m if the interest rate increases from 1% to 6%?
The value of m is expected to decrease by approximately 45 %.
(Round your response to the nearest integer)

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