b. Find the equilibrium interest rate by setting the demand for central bank money equal to the supply of central bank money. c. What is the overall supply of money? Is it equal to the overall demand for money at the interest rate you found in part (b)? d. What is the impact on the interest rate if central bank money is increased to $300 billion? e. If the overall money supply increases to $3,000 billion, what will be the impact on i? [Hint: Use what you discovered in part (c).]

b. Find the equilibrium interest rate by setting the demand for central bank money equal to the supply of central bank money. c. What is the overall supply of money? Is it equal to the overall demand for money at the interest rate you found in part (b)? d. What is the impact on the interest rate if central bank money is increased to $300 billion? e. If the overall money supply increases to $3,000 billion, what will be the impact on i? [Hint: Use what you discovered in part (c).]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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