.., ,. \Review Assignment 11 i Saved Help Save & Exit Submit 3 The table below shows money demand and supply schedules for a hypothetical economy, Argentia Nominal Interest Money Demanded Money Supplied Rate (Dme) (Sme) (%) ($ billions) ($ billions) 2.5 10 10 W 10 10 points 2 20 10 40 10 10 eBook a. Draw a graph showing Dmo and Smo- Plot all 4 points for the money demand curve (Dmo). For the money supply curve plot only the 2 endpoints when Ask the interest rate is 4% and 0%. Print Money Demand and Supply References for an economy Tools Dmo Dmi 3.5 Mc Graw Hill ENG US O N delet end prt sc home SUPP debut fin insert imprecr. F11 F12 esc F6 F7 F8 F9 F10 DII F3 F4 F5 echappa F13 If the interest rate is initially 1%, the quantity of money supplied (Click to select) | quantity demanded. Wealth holders respond to this (Click to select) y in the money market by |(Click to select) | bonds. This pushes (Click to select) | bond prices and (Click to select) v the interest rate until equilibrium in the money market is reached. d. If the money supply increases by $10 billion at each possible interest rate then the money supply |(Click to select) v |money demand at the initial equilibrium interest rate. Wealth holders respond to this |(Click to select) | in the money market by |(Click to select) v bonds. 10 This pushes (Click to select) y bond prices and (Click to select) |the interest rate until a new equilibrium in the money market is points reached at an interest rate of 1%. Draw the new money supply curve Sm1 on your graph. Plot only the 2 endpoints when the interest rate is 4% and 0%. eBook Ask e. If the money supply stays at Sm1 and money demand increases by $10 billion at each possible interest rate then the money supply (Click to select) y money demand at the initial equilibrium interest rate of part (d). Wealth holders respond to this (Click to select) |in the Print money market by (Click to select) | bonds. This pushes (Click to select) y |bond prices and (Click to select) | the interest rate until a new 1%. References equilibrium in the money market is reached at an interest rate of Draw the new money demand curve Dm1 on your graph. Plot all 4 points for the money demand curve Dm1. f. If real output in the economy increases the equilibrium interest rate (Click to select) ~ If the price level in the economy decreases the equilibrium interest rate (Click to select) v Mc Graw ENG O N US delete end prt sc home insert suppr. debut fin imprecr. F9 F10 F11 DII F8 F5 F6 F7 X F3 "F4 F1 F2 o # O