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Suppose the money market is initially in equilibrium at a point where the real interest rate is equal to 3 percent. What would be the
Suppose the money market is initially in equilibrium at a point where the real interest rate is equal to 3 percent. What would be the impact on the money market if there was a large economic boom in the economy? In the adjacent graph, show the initial money market equilibrium along with the impact of the expansion in the economy. 1.) Using the line drawing tool, illustrate the initial money supply and money demand curves. Label your curves '' and '.' 2.) Using the point drawing tool, illustrate the initial money market equilibrium where the real interest rate is equal to 3 percent. Label your point 'A.' 3.) Using the line drawing tool, illustrate the change in the money market that results from the growth of real GDP. Label your new curve appropriately. 4.) Using the point drawing tool, illustrate the new money market equilibrium. Label your point 'B
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