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Please help on the following 1. What is the relationship between the demand for Money and interest rate? The following refer to the demand for

Please help on the following

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1. What is the relationship between the demand for Money and interest rate? The following refer to the demand for Money M ($billions) and the rate of interest R (9/6): Emiz = 1156,2132 = 20.5,Zmiri = 146 M R Where mi and Ti refer to the deviations from the sample 36 6.2 mean values for M and R respectively. a) Assuming a relationship M = a + R + 8, obtain the OLS 50 4'6 estimators for a: and . 45 5'1 b) Given S(\")= 0.96, is signicant (at a 5% signicance 30 7-3 level)? 20 8-9 c) If in a 9'\" economy, the rate of interest is R = 8, predict the 35 5. 3 demand for money in the economy. 37 6.6 62 3.4

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