Calculate the demand for money for each of the given

Assignment Help Microeconomics

Reference no: EM13394888

You are given the following equation for the real demand for money: (M/P)d= .25y-50r.

A. Compute the demand for money for each of the following interest rates when income is equal to $11,940, $12,000, $12,060, $12,120, and $12,180:

R=4.4, r=4.7, r=5.0, r=5.3, r=5.6, r=5.9, r=6.2

B. Given your answers to part a, graph the demand for money curves when income equals $11,940 and income equals $12,180.

C. Suppose the real money supply, Ms/P, equals $2,750. Given your answers to part a, find the interest rates and levels of real income at which the money market is in equilibrium. Use these combinations of the interest rate and real income to graph the LM curve, given that the real money supply equals $2,750. Label this curve LMo.

D. Suppose the real money supply increases to $2,780, Given your answers to part a, find the new combination of the interest rates and real income at which the money market is in equilibrium. Use these combinations to graph the new LM curve, given that the real money supply now equals $2,780. Label this curve as LM1.

E. Suppose the real money supply decreases to $2,720. Given your answers to part a, find the new combination of the interest rates and real income at which the money market is in equilibrium. Use these combinations to graph the new LM curve, given that the real money supply now equals $2,720. Labe this curve LM2.

Reference no: EM13394888

Questions Cloud

Identify the best value discipline generic strategy and : write a paper of 1400 words that evaluates alternatives an organization must consider to realize growth.1.identify the

Compute depreciation a machine cost 500000 on april 1 2008 : calculate depreciation. a machine cost 500000 on april 1 2008. its estimated salvage value is 50000 and its expected

What have been the impacts of organizations who have : michael porter was a business researcher who made popular the concept of a value chain that is common to most business

Understanding the tax consequences of your financial : understanding the tax consequences of your financial planning decisions is very important. these decisions may

Calculate the demand for money for each of the given : you are given the following equation for the real demand for money mpd .25y-50r.a. compute the demand for money for

What company is familiar for its successful or tightly : supplier selection is now a global concern with competition coming from countries all over the world. circumstances

Using program cycle and concept of top- down modular : using program cycle and concept of top- down modular approach and pseudocode to design a suitable write program using

What role did government play in creating financial crisis : what role did the government play in creating the financial crisis? what role did fannie mae and freddie mac play in

A marketer is interested in segmenting a business market : 1.the new more strategically oriented purchasing departments have a mission. which of the following most accurately

User Account

All Pages