a. If money supply is equal to 90, what are the values of equilibrium interest rate and investment spending? 2 b. If money supply is equal to 130, what are the values of equilibrium interest rate and investment spending? Interest rate: Investment: $ Interest rate: Investment: $ %
a. If money supply is equal to 90, what are the values of equilibrium interest rate and investment spending? 2 b. If money supply is equal to 130, what are the values of equilibrium interest rate and investment spending? Interest rate: Investment: $ Interest rate: Investment: $ %
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:16
14
12
10
8
6
4
2
0
16
14
12
10
8
6
4
2
20
A
(100, 10)
40 60 80 100 120 140 160
Quantity of money
B
G
100 120 140 160 180 200 220 240 260
Quantity of investment
MD
Tools
MS
o
MD₂
Transcribed Image Text:a. If money supply is equal to 90, what are the values of equilibrium interest rate and investment spending?
Interest rate:
%
Investment: $
b. If money supply is equal to 130, what are the values of equilibrium interest rate and investment spending?
Interest rate:
Investment: $
c. If money supply is equal to 110, and money demand increases by 40, draw in the money supply and new money demand curve in
graph A. Plot only the endpoints of MS and MD2 in graph A and position those points on the edges of the graphing area.
d. What are the values of equilibrium interest rate and investment spending?
Interest rate:
Investment: $
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