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Suppose that money demand is given by Md=$Y(0.380.7i) where $Y is $150. a. If the Federal Reserve sets an interest rate target of 9%, the
Suppose that money demand is given by
Md=$Y(0.380.7i)
where $Yis $150.
a. If the Federal Reserve sets an interest rate target of 9%, the money supply it must create is $_________ (Round your response to two decimal places.)
b. If the Federal Reserve wants to increase the interest rate i from 9 to 13%, the new level of the money supply it must set is $
_____________( Round your response to two decimal places.)
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