The graph below illustrates the money demand and investment demand for the economies of Pabst and Kokanee.Interest rateInterest rate15131195311513119531706080709080100 110 120Quantity of money90 100 110 120Quantity of moneyMDMSMSMDPabstInterest rateKokaneeInterest rate12108641211109865430010102030 40 50 60Quantity of investment20 30 40Quantity of investment50704(60,8)60 a. If money supply is increased by 15, what will be the new interest rate? Round your answers to one decimal place.Pabst:Kokanee:b. What will be the increase in investment spending as a result of this new interest rate?Pabst:Kokanee:%Kokanee:%c. If the multiplier is 3 in each economy, what will be the increase in GDP?Pabst:d. In which economy would monetary policy be more effective in closing a recessionary gap?(Click to select)

The equilibrium is where the money demand curve intersects the money supply curve. The interest rate…

a. If money supply is increased by 15, what will be the new interest rate? Round your answers to one decimal place. Pabst: Kokanee: b. What will be the increase in investment spending as a result of this new interest rate? Pabst: Kokanee: % Pabst: c. If the multiplier is 3 in each economy, what will be the increase in GDP? Kokanee: %

a. If money supply is increased by 15, what will be the new interest rate? Round your answers to one decimal place. Pabst: Kokanee: b. What will be the increase in investment spending as a result of this new interest rate? Pabst: Kokanee: % Pabst: c. If the multiplier is 3 in each economy, what will be the increase in GDP? Kokanee: %

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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pls send me answer of all the parts in details and i will rate you.
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