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What should be the new offer ms

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Reference no: EM133215231

Suppose the money offer Ms = 20.

The demand for money, Md= Y(25-i), assuming that the equilibrium income is equal to 100, determine:

a) The equilibrium interest rate.

b) Suppose that the Central Bank wishes to raise the interest rate by 10 percentage points, what should be the new offer Ms.

c) Plot (graph) conditions a and b.

Reference no: EM133215231

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