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Consider an economy with the money demand function is ()*+ Round answers to two places after the decimal when necessary. f. Assume in the aftermath
Consider an economy with the money demand function is ()*+ Round answers to two places after the decimal when necessary. f. Assume in the aftermath of the announcement, both the economy's output and the current money supply are unchanged. Calculate the new price level. Price level= The decline in the nominal interest rate reduces the opportunity cost of holding money, leading to an increase in the demand for real money balances. 4 f. Assume in the aftermath of the announcement, both the economy's output and the current money supply are unchanged. Calculate the new price level. Price level= The decline in the nominal interest rate reduces the opportunity cost of holding money, leading to an increase in the demand for real money balances. g. If the new central banker wants to keep the price level the same after the announcement, at what level should she set the money supply? Moncy supply $
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