Money market with inflation and rising money supply, Macroeconomics

Assignment Help:

Q. Money market with inflation and rising money supply?

1339_Money market with inflation and rising money supply.png

Figure: The money market with inflation and rising money supply

If we let πM refer the growth rate in money supply, we can determine the following. For a given Y, R will increase if π > πM (prices increase faster than money supply) and R will fall if πM> π. R is unchanged if π = πM.

For instance, when π > πM, MD curve glides out to the right faster than MS curve that is why R increases.


Related Discussions:- Money market with inflation and rising money supply

Walkers'' labor to produce 2 goods, This problem is based on the Ricardian ...

This problem is based on the Ricardian Model. Assume that 2 countries, Stormlands and Reach, use White Walkers' labor to produce 2 goods, lumber and wheat.

Difference between opportunity and accounting cost, Provide an explanation ...

Provide an explanation of difference between opportunity and accounting cost, and accounting and economic profits. Then, please provide an example from your experience where opport

LM or IS curve, I''m trying to figure out what the effect would be on LM or...

I''m trying to figure out what the effect would be on LM or IS curve, and additionally the interest rate and income if (a) the transactional demand for money increases, (b) the liq

Peers for a country, What are the best criteria to select peers for a count...

What are the best criteria to select peers for a country ?

Calculate the demand and probability, Sally's Silk Screning produces specia...

Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event its

What is the value of the swap in terms of both bonds and fra, Suppose that ...

Suppose that the yield curve is flat at 5% per annum with continuous compounding. A swap with a notional principal of $100 million in which 6% is received and six-month LIBOR is pa

Damaging to the economy, Why do financial crises occur and why are they so ...

Why do financial crises occur and why are they so damaging to the economy?

The Assignment, OPEC oil cartel becomes subject to this tension or conflict...

OPEC oil cartel becomes subject to this tension or conflict such that the cartel gives way to a more competitive oil market resulting in a dramatic decrease in the world oil price.

GLOBAL LOSSES, SUPPOSE MR.CHANSA DEPOSIT HIS MONEY INTO BANK-B,HOW WOULD TH...

SUPPOSE MR.CHANSA DEPOSIT HIS MONEY INTO BANK-B,HOW WOULD THE T-BALANCE SHEET LOOK LIKE FOR BANK-B

What are the indicators of development, What are the indicators of developm...

What are the indicators of development? Economic development is a complicated multi-dimensional idea. Preferably each aspect of development needs its own indicator. • Prof

Write Your Message!

Captcha
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!

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