Q in the early 1980s new legislation allowed banks to pay

Assignment Help Business Economics

Reference no: EM13354817

Q. "In the early 1980s, new legislation allowed banks to pay interest on checking deposits, which they could not do previously.

a. if we define money to include checking deposits, what effect did this legislation have on money demand? Explain.

b. If the Federal Reserve had maintained a constant money supply in the face of this change, what would have happened to the interest rate? What would have happened to the aggregate demand and aggregate output?

c. If the Federal Reserve had maintained a constant market interest rate (the interest rate on nonmonetary assets) in the face of this change, what change in the money supply would have been necessary? What would have happened to the aggregate demand and aggregate output?"

Reference no: EM13354817

Questions Cloud

Q1 suppose that disposable income consumption and saving in : q1. suppose that disposable income consumption and saving in some country are 200 billion 150 billion and 50 billion

Q1 alpha airlines the only carrier currently offering : q1. alpha airlines the only carrier currently offering flights to and from town a heard that beta airlines was thinking

Q1 what are the advantages and disadvantages of austerityq2 : q1. what are the advantages and disadvantages of austerity?q2. leadbelly co. sells pencils in a perfectly competitive

Cores on computer systemssingle-processor computers were : cores on computer systemssingle-processor computers were able to handle and process smaller sets of data. as

Q in the early 1980s new legislation allowed banks to pay : q. in the early 1980s new legislation allowed banks to pay interest on checking deposits which they could not do

Q1 if the demand curve is qp 20-2p and the marginal cost : q1. if the demand curve is qp 20-2p and the marginal cost is constant at 8 what is the profit maximizing monopoly

Description building the right organisational : description building the right organisational culture.nbspthe organisationrsquos culture is often described as the

Qa new water pump has been purchased for 1400 that is : q.a new water pump has been purchased for 1400 that is expected to require 600 per year in annual operating costs plus

Q1 how concentrated are income gains among the top 110th of : q1. how concentrated are income gains among the top 110th of one percent?q2. how does cost-consciousness help in better

User Account

All Pages