Need answer of question 9 and 10

9. Tools of monetary policy Suppose that the household nominal income in an economy is f 5.000 billion and the demand for money is given by a. b. M\" = Y(0.08 0.4:) If the money demand is equal to 100 billion what is the interest rate? What should the central bank do to interest rates if it wants to increase the money supply to 300 billion? If the central bank decides to expand money supply to 300 billion. should it change the interest rate or imple- ment open market operations? 10. Monetary policy in a liquidity trap Suppose that money demand in problem 9 holds as long as interest rates are positive. Answer the following questions when the interest mte is equal to zero: a. b. What is the demand for money when the central bank sets the interest rate at zero? If the central bank cuts interest rate to -0. 5%. what is the effect on the demand for money? Which central banks have adopted a zero or a sub-zero interest rate policy? . Can you justify the reasons behind the negative interest rate policy? Do these reasons always hold in practice? Bank of Japan has been using negative interest rates for a long period of time. Go to the Web site of the Bank of Japan and check the statistical database (httpszllwww .stat-search.boi.or.jp) to trace the interest rates. Identify the periods when Bank of Japan followed a zero and sub- zero interest rate policy. Check from the same database how interest rates affect money stock