User Account

All Pages

What is the equilibrium rate of interest

Assignment Help Macroeconomics
Reference no: EM132488685

Using the data in the table below, answer the following questions. (Hint: draw a graph when possible)

Interest Rate% Money Demand

(billions of dollars)

18 180

17 200

16 220

15 240

14 280

13 340

12 400

11 480

10 580

Assume that the money supply is equal to 240 (do not use % signs in your answers)

Part 1: What is the equilibrium rate of interest? _________

Part 2: Assume that the Bank of Canada buys bonds and increases the money supply to 400 What is the equilibrium rate of interest? _________

Part 3: A fall in income causes the demand for money to ________ by 60 billion. If the money supply is 160, what is the equilibrium rate of interest? _______

Part 4: Assuming the change in part 3, if money supply is 420, what is the equilibrium rate of interest? ______

Part 5: An increase in income causes the transaction demand for money to ________ by 40 billion at each interest rate. (Assume the change in part 3 did not occur. Given a money supply of 240, what is the equilibrium rate of interest? ________

Part 6: Given the change in part 5, if money supply is 380, what is the equilibrium rate of interest?  ________

Reference no: EM132488685

Questions Cloud

Find the long-run growth of physical capital : Find the long-run growth of physical capital, human capital, and output in this economy.
Describe the likely short-run outcome : If the exchange rate is expected to depreciate by 2 percent, which one of the following would describe the likely short-run outcome?
Determine the plantwide overhead rate for Laval : Question - Assigning overhead costs using the plantwide rate and departmental rate methods. Determine the plantwide overhead rate for Laval
What is total factor productivity : As an economist working at the International Monetary Fund, you are given the following data for Japan: observed per capita GDP, relative to the United States
What is the equilibrium rate of interest : Using the data in the table below, answer the following questions. (Hint: draw a graph when possible)
What does ceteris paribus mean in economics : What does ceteris paribus mean in economics? Explain your answer. How do you distinguish a good from a service?
Quantity of output and unemployment in short run : which way would they shift? Show what happen to the price level, the quantity of output and unemployment in short run?
What is the per unit cost for manufacturing overhead : Bird's Eye View has identified five different production activities as well as the best cost driver. What is the per unit cost for manufacturing overhead
What factors would influence mullets decision to refund : What is the bond refunding's NPV? Do not round intermediate calculations. What factors would influence Mullet's decision to refund

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd