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Who Fixes the Quantity of Real Money Balances in Closed

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Who fixes the quantity of real money balances in closed and open economies? In a small open economy, the interest rate R is determined by what rate?


Definitions:

Demand Is Elastic

A situation where the quantity demanded of a product changes significantly with a change in its price.

Total Revenue

The overall amount of money earned by a firm from the sale of its products or services before any costs are subtracted.

Point Elasticity

A measure of elasticity that uses the slope measurement.

Slope Measurement

The rate at which a line or curve inclines or declines, indicating the relationship between changes in variables on a graph.

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