A standard "money demand" function used by macroeconomists has the form In(m)=Bo+B₁In(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 B₁ = 1.51 and ₂ = -0.07. What is the expected change in m if GDP increases by 6%? The value of m is expected to (Round your respon by approximately. ger) increase decrease

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A standard "money demand" function used by macroeconomists has the form
In(m)=Bo+B₁In(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 B₁ = 1.51 and ₂ = -0.07.
What is the expected change in m if GDP increases by 6%?
The value of m is expected to
(Round your respon
by approximately %.
ger)
increase
decrease
Transcribed Image Text:A standard "money demand" function used by macroeconomists has the form In(m)=Bo+B₁In(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 B₁ = 1.51 and ₂ = -0.07. What is the expected change in m if GDP increases by 6%? The value of m is expected to (Round your respon by approximately %. ger) increase decrease
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