14 In Minland in problem 7, a financial crisis occurs. The people begin to distrust the banks...
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14 In Minland in problem 7, a financial crisis occurs. The people begin to distrust the banks and withdraw their deposits. At the same time, they cut up their smart cards and start using currency again. The financial crisis brings a deep recession. a Modify the numbers in the spreadsheet by making up your own numbers that are consistent with the events just described. b Draw the demand for money curve and supply of money curve that describe the initial situation and the situation based on your numbers. c What would have to happen to the supply of money in Minland if the interest rate was to remain constant through these events?
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