The total demand for money

Assignment Help Business Economics

Reference no: EM137594

Q. The total demand as well as for money is equal to the transactions demand as well as plus the asset demand as well as for money.

(a) Assume that each dollar held for transactions purposes is spent on the average five times per year to buy final goods as well as services. If the nominal GDP is $10,000 billion ($10 trillion), what is the transaction demand as well as?

(b) The table below shows the asset demand as well as at certain rates of interest. Using your answer to part (a), complete the table to show the total demand as well as for money at various rates of interest. Interest rate asset demand as well as total demand as well as (in %) (Billions) 10 $ 30 $ 8 60 $ 6 90 $ 4 120 $

(d) if the money supply rises, will the equilibrium rate of interest rise or fall?

(e) if GDP rises, will the equilibrium rate of interest rise or fall?

Reference no: EM137594

Questions Cloud

Fixed exchange rate regime on household : What is the impact of a tax cut in an economy operating under a fixed exchange rate regime on household spending, interest rates.

Driver faces probability of an automobile accident : Assume that every driver faces a 1% probability of an automobile accident every year. An accident will, on average, cost each driver $10,000.

Briefly discuss how some materials might be linked : How might you infer what type of volcanoes erupted in a given area based on the type of volcanic deposits now found as a layer of rocks? Give specific examples, and briefly discuss how some materials might be linked to different types of volcanoes.

History of iron and steel industry : How has the technology changed? Where do the workers come from? How are the products advertised and marketed.

The total demand for money : The total demand as well as for money is equal to the transactions demand as well as plus the asset demand as well as for money.

What sort of correlation : What sort of correlation (positive or negative) would you expect to see between the population densities or growth rates of each trophic level in this system under the primary productivity hypothesis.

Other people exploit the same opportunity : If other people exploit the same opportunity, what will happen to the cost in Thailand as well as in Malaysia.

The best explanation for the universes intricacy : How does Hume show that, using analogy, we cannot close that the creator of the universe is wise, one, incorporeal, good, or even still existing.

Impact of a tax cut in an economy operating : What is the impact of a tax cut in an economy operating under a flexible exchange rate regime on household spending, interest rates.

User Account

All Pages