Question
The left diagram in the above figure shows the equilibrium in the money market in Canada, and the one on the right shows the demand
The left diagram in the above figure shows the equilibrium in the money market in Canada, and the one on the right shows the demand for investment , as a function of interest rate . Suppose the desired reserve ratio in Canada is 40 % . The Bank of Canada has decided to stimulate the investment in the economy by printing and injecting currency into the money market . The goal is to increase the investment by $ 10 million . How much currency must the bank print to achieve the desired outcome ? ( Calculate your answer in millions of CAD , round it to one decimal places , and write it without units . E.g. , write 1.0 for $ 1 million . )
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