What is the equilibrium interest rate

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Reference no: EM131104221

The money demand function is

M^D = 1175-110i

where i is the interest rate in percent (do not convert it to a decimal fraction). The money supply: M^s=460

(a) What is the equilibrium interest rate?

(b) What happens to the equilibrium interest rate if the supply of money is reduced by 165?

Reference no: EM131104221

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