In recent years, bankomats ATMs have proliferated in Kazakhstan. Assume a closed economy.

(a) Would you expect ATMs to raise or lower money demand? Why?

(b) If the money supply does not change, how might AMTs affect output and the interest rate? That is, do they rise or fall?

(c) Now suppose that Kazakhstan is a small open economy that must take the global interest rate as its own. How might ATMs affect output, the interest rate, and the exchange rate in Kazakhstan?