Question
2. A) If the Central bank reduces reserve requirement, what effect would this have on price level and value of money? Explain using double axis
2. A) If the Central bank reduces reserve requirement, what effect would this
have on price level and value of money? Explain using double axis diagram.
B) What happens to price level and nominal GDP if velocity of money is 5, when
Money supply (M1) increases from $2000 to $4000 and real output is constant at
500 units.
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Microeconomics
Authors: Robert Pindyck, Daniel Rubinfeld
8th edition
978-0132870436, 132870436, 013285712X, 978-0133371178, 133371174, 978-0132857123
