In the following table, fill in the column labeled Value of Money. Price Level (P) Value of Money (1/P) 0.80 1.25 - 1.00 1.33 2.00 VALUE OF MONEY Now consider the relationship between the quantity of money that people demand and the price level. The lower the price level, the less required to complete transactions, and the more money people will want to hold in the form of currency or demand deposits. Assume that the Federal Reserve initially fixes the quantity of money supplied at $3.5 billion. 2.00 1.75 1.50 Use the orange line (square symbol) to plot the initial money supply (MS₁) set by the Fed. Then, referring to the previous table, use the blue connected points (circle symbol) to graph the money demand curve. 1.25 1.00 0.75 0.50 0 0.25 1.00 0.75 ▼ 0.50- 0 Quantity of Money Demanded (Billions of dollars) 1.5 2.0 3.5 7.0 1 2 3 5 6 QUANTITY OF MONEY (Billions of dollars) 7 According to your graph, the equilibrium value of money is 8 O MS₁ -O Money Demand. MS₂ (?) money. therefore the equilibrium price level is.
IS-LM-PC Analysis
The IS (Investment Saving), LM (Liquidity Preference- Money Supply), and PC (Philips Curve) is the model that looks at the dynamics of output and inflation. It takes into account the central bank policy decision to adjust the inflation and real interest rate in the economy. It enables the economist to weather to priorities between employment and inflation rate analyzing the model. It is a practice-driven approach adopted by economists worldwide.
IS-LM Analysis
The term IS stands for Investment, Savings, and LM stands for Liquidity Preference, Money Supply. Therefore, the term IS-LM model is known as Investment Savings – Liquidity preference money Supply. This model was introduced by a Keynesian macroeconomic theory which shows the relationship between the economic goods market and loanable funds market or money market. In other words, it shows how the market for real goods interacts with the financial markets to strike a balance between the interest rate and total output in the macroeconomy. This particular model is designed in the form of a graphical representation of the Keynesian economic theory principle. The output and money are the two important factors in an economy.
can you help me plug in the answers to this graph and the question under it the ms1 line only has two points as does ms2 as well
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