Suppose the monetary base is an economy is equal to 100 and nominal GDP is equal to 10,000. The money demand function is given as Md=$Y(0.4-2i). Interest rates are measured as a fraction. Suppose that initially people don't hold any currency and that the bank hold 10% of deposits as reserves. a) calculate the equilibrium demand for central bank money. b) solve for the equilibrium interest rate in the market for central bank money.

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