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Homework answers / question archive / Assume the? following: i

Assume the? following: i


Assume the? following:

i. The public holds no currency.

ii. The ratio of reserves to deposits ?(θ?) is 0.08.

iii. The demand for money is given by Md=$Y(0.84−2.7i).


If the monetary base is ?$77 billion and nominal income is ?$4.8 ?trillion, the equilibrium interest rate will be

23.70. ( this correct already)


Now suppose the monetary base? (central bank? money) increases to ?$153 billion.

As a? result, the equilibrium interest rate becomes ___________ ?(Round your response to two decimal places?.)

Option 1

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Option 2

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