Thursday
July 31, 2014

Homework Help: Economics

Posted by Frank on Monday, January 29, 2007 at 8:26pm.

Hypothetical Economy:
-Money Supply= $200 billion
-Quantity of money demanded for transactions=$150 Billion
-Quantity of money demanded as an asset=$10 billion at 12% interest
-increaseing by $10 billion for each 2 percentage point fall in the interest rate.

A. What is the equilibrium interest rate? Explain.

B. At equilibrium interest rate, what are the quantity of money supplied, the total money demanded, the amount of money demnded for transactions, and the amount of money demanded as and asset?

A) Equilibrium occurs where Money Supply = Money Demand. At what interest rate does the assent demand for money = $50B

B) once you answer A, the rest should fall out fairly easily.

a = four percent

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Principles of Finance - Determine the size of the M1 money supply using the ...
economics - Am i right, just checking as too many wrong homework assignments at ...
economics (4) - Assume that the following data describe the condition of the ...
Economics (4) - Assume that the following data describe the condition of the ...
economics (4) - Assume that the following data describe the condition of the ...
Macroeconomics - The money supply in Freedonia is $200 billion. Nominal GDP is $...
Economics - The value of the marginal propensity to save is 0.2. If real GDP ...
Macroeconomics - Suppose GDP is $800 billion, taxes are $150 billion, private ...
Economics - Suppose that S(savings) = $4 billion when Real GDP = $200 billion & ...
Macroeconomics - Suppose the money supply is currently 500 billion and the Fed ...

Search
Members