Suppose that: MD 800 + 0.2Y – 5000(r + n) Ms 1000 + 0.1Y – 3000n a. If n = 0.1;r = 0.1 ;Y = 2000, in equilibrium, what is the price level? b. What is the velocity? (using the same parameters as in a.) c. If output increases so that Y = 3000, what is the price level? d. What is the velocity? What is the change rate of the velocity? What does this number mean? e. Now, if n = 0.1 ;Y = 2000; and price level is forced to be P = 6, what is the equilibrium interest rate? f. What is now the velocity?
Suppose that: MD 800 + 0.2Y – 5000(r + n) Ms 1000 + 0.1Y – 3000n a. If n = 0.1;r = 0.1 ;Y = 2000, in equilibrium, what is the price level? b. What is the velocity? (using the same parameters as in a.) c. If output increases so that Y = 3000, what is the price level? d. What is the velocity? What is the change rate of the velocity? What does this number mean? e. Now, if n = 0.1 ;Y = 2000; and price level is forced to be P = 6, what is the equilibrium interest rate? f. What is now the velocity?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please I need the solutions FOR JUST SUB QUESTIONS d,e and f. Thank you
![Suppose that:
MD
800 + 0.2Y – 5000(r + n)
Ms
1000 + 0.1Y – 3000n
a. If n = 0.1;r = 0.1 ;Y = 2000, in equilibrium, what is the price level?
b. What is the velocity? (using the same parameters as in a.)
c. If output increases so that Y = 3000, what is the price level?
d. What is the velocity? What is the change rate of the velocity? What does this number
mean?
e. Now, if n = 0.1 ;Y = 2000; and price level is forced to be P = 6, what is the equilibrium
interest rate?
f. What is now the velocity?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0531f21-3d28-445c-a55b-a17192351aab%2Fd6f83de3-3fc0-48d0-b75e-5b840cd6c139%2Fseh8de4.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose that:
MD
800 + 0.2Y – 5000(r + n)
Ms
1000 + 0.1Y – 3000n
a. If n = 0.1;r = 0.1 ;Y = 2000, in equilibrium, what is the price level?
b. What is the velocity? (using the same parameters as in a.)
c. If output increases so that Y = 3000, what is the price level?
d. What is the velocity? What is the change rate of the velocity? What does this number
mean?
e. Now, if n = 0.1 ;Y = 2000; and price level is forced to be P = 6, what is the equilibrium
interest rate?
f. What is now the velocity?
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