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?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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?
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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