Reference no: EM1369342
Q. Graphing real money demand as a function of interest rate, which of following would shift real money demand curve to left?
1. a decrease in price level
2. An increasing interest rate
3. an increasing price level
4. an increasing real income
5. None of above.
An open market purchase of bonds by Fed
1. will shift money supply curve to left
2. will drain reserves from banking system and shift money supply curve to right
3. will inject reserves into banking system and shift money supply curve to left
4. will shift money supply curve to right
Suppose current interest rate is 5% and you pay $250 for a bond.
How much should bond pay you in one year?
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