Suppose the Money Demand Function Is M^D = P ×

question 62

Multiple Choice

Suppose the money demand function is M^D = P × [(0.25 × Y) ? (100 × i) ],
Where Y is expressed in billions of dollars and i is expressed in percentage points.If P = 2, Y = 5,000, and i = 5, then the nominal quantity of money demanded equals

• A)750.
• B)1,000.
• C)1,500.
• D)2,000.

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Definitions:

Global Bank

A financial institution that provides a wide range of banking services in multiple countries.

Basic Standard Deduction

represents the portion of income not subject to tax that can reduce the taxable income, set by the IRS, varying by filing status.

Dependent

An individual, typically a child or family member, who relies on another for financial support and qualifies for certain tax benefits.

Earned Income

Income generated from active employment and work, including wages, salaries, tips, and other compensation.