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Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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
Transcribed Image Text:A standard "money demand" function used by macroeconomists has the form
In(m) = Po + B₁In(GDP) + B₂R,
Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent per
year. Supposed that B₁ = 2.32 and B₂ = -0.02.
What is the expected change in m if GDP increases by 9%?
The value of m is expected to
by approximately %.
(Round your response to the nearest integer)
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