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johnpaul92 johnpaul92
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8 years ago
Suppose the money demand function is
   M to power of ((d))/P = 1000 + 0.2Y - 1000 (r + π to power of ((e))).
(a)   Calculate velocity if Y = 2000, r = .06, and π to power of ((e)) = .04.
(b)   If the money supply (M to power of ((s))) is 2600, what is the price level?
(c)   Now suppose the real interest rate rises to 0.11, but Y and M to power of ((s)) are unchanged. What happens to velocity and the price level? So if the nominal interest rate were to rise from 0.10 to 0.15 over the course of a year, with Y remaining at 2000, what would the inflation rate be?
Textbook 
Macroeconomics

Macroeconomics


Edition: 8th
Authors:
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supamansupaman
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8 years ago
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johnpaul92 Author
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#2
8 years ago
This is incredible, wasn't expecting anyone to answer this one
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#3
8 years ago
Take care for now
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