Suppose that the money demand function is - - 600 – 75r where r is the interest rate in percent. The money supply M is SIS00, and the price level Pis fixed at 5. Round answers to one place after the decimal when necessary. c. What happens to the cquilibrium interest rate, r, if the supply of money is raised from $1500 to $1725? d. If the central bank wants the interest rate to be 6.0 percent, what money supply should it set? Money supply =$

Suppose that the money demand function is - - 600 – 75r where r is the interest rate in percent. The money supply M is SIS00, and the price level Pis fixed at 5. Round answers to one place after the decimal when necessary. c. What happens to the cquilibrium interest rate, r, if the supply of money is raised from $1500 to $1725? d. If the central bank wants the interest rate to be 6.0 percent, what money supply should it set? Money supply =$

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter24: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 1CQQ

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