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demand for money given as M^d = $ Y (0.8-4i) money base =$1oo billion, nominal Y=$ 5 trillion a) find equilibrium i by by equating
demand for money given as
M^d = $ Y (0.8-4i)
money base =$1oo billion, nominal Y=$ 5 trillion
a) find equilibrium i by by equating demand for central bank money to supply of central bank money.
b) What is the overall supply of money if public holds no currency and ratio of reserve to deposit is 0.1
c)Is it equal to the overall demand for money at the i found in the above part
d) what is the impact on i if central bank money is increased to $300 billion
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