Question
Carefully explain the impact on the money demand curve, money supply curve, equilibrium interest rate and the quantity of money due to each of the
Carefully explain the impact on the money demand curve, money supply curve, equilibrium interest rate and the quantity of money due to each of the following:
The economy grows (GDP increases) but the central bank moves to keep interest rates constant
1.Impact on money supply curve?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
2.Impact on money demand curve?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
3.Impact on equilibrium interest rate?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
4.Impact on quantity of money?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
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Probability & Statistics For Engineers & Scientists
Authors: Ronald E. Walpole, Raymond H. Myers, Sharon L. Myers, Keying
7th Edition
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