Suppose Real Output Is 12,500, and the Demand for Real

question 81

Essay

Suppose real output is 12,500, and the demand for real money balances is = - 125i. If the equilibrium interest rate is 7 percent, calculate the money supply . If the central bank sets the interest rate at 8 percent, what is the new money supply?

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Definitions:

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Vasospasm

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