Money demand in an economy in which no interest is paid on moneyis:

MdP=500+0.2Y1000i,

where Y is real income and i is the nominal interest rate.

a. Suppose that P= 50, Y=500 , and i= 0.08. Calculate the following:

Real moneydemand:

nothing

Nominal moneydemand:

nothing

Velocity:

nothing

(use whole numbers for the answers to both money demand questions but use two decimal places for the answer about velocity)

b. The price level doubles from P= 50 to P= 100. Recalculate the values for these threevariables:

Real moneydemand:

nothing

Nominal moneydemand:

nothing

Velocity:

nothing

(use whole numbers for the answers to both money demand questions but use two decimal places for the answer about velocity)