Please Don't answer by pen paper i will rate Interest rate (%)9M₁Mo500200Money (S million)Figure 14.5Refer to Figure 14.5. Assume the interest rate equals 8% and the money supply decreases from Mto M. if the interest rate remains at 8O money demand will increaseO money demand will decrease.Othere will be an excess demand for moneyO there will be an excess supply of money

Equilibrium in money market is where the money demand curve intersects the money supply curve.…

Interest rate (%) Othere will be an excess demand for money there will be an excess supply of money 10 6 M₁ Mo 500 200 Money (5 million) Figure 14.5 Refer to figure 14.5. Assume the interest rate equals 8% and the money supply decreases from M to the intere rate remains at a O money demand will increase O money demand will decrease

Interest rate (%) Othere will be an excess demand for money there will be an excess supply of money 10 6 M₁ Mo 500 200 Money (5 million) Figure 14.5 Refer to figure 14.5. Assume the interest rate equals 8% and the money supply decreases from M to the intere rate remains at a O money demand will increase O money demand will decrease

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter15: Monetary Theory And Policy

Section: Chapter Questions

Problem 1.2P

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