Question 3 The demand for money in Utopia is given by the following equa- tion. MP /P = 0.8Y - 1, 2001 (a) If the price level P = 1.o, calculate the stock of money demanded in Utopia for the following values of real GDP and nominal interest rates. (For interest rate of x%, use i = r.) (M = 3,200, M" = 5,600, M" = 7,200) MD Y 10,000 470 10,000 270 9.000 070 (a) Suppose that real GDP is 10,000 and the nominal interest rate is 4%. If the price level were to double from 10 to 20, what is