ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:Rate of interest (%)
16
14
12
10
00
6.
4
2
0
40
80
B
120 160 200
Quantity of investment
144
240 280
Transcribed Image Text:a. If money supply is equal to 80, what are the values of equilibrium interest rate and investment spending?
Interest rate:
Investment: $
b. If money supply is equal to 120, what are the values of equilibrium interest rate and investment spending?
Interest rate:
Investment: $
%
Investment: $
%
c. If money supply is equal to 60, and money demand increases by 40, draw in the money supply and new money demand curve in
graph A. Plot only the endpoints of MS and MD2 in graph A and position those points on the edges of the graphing area.
d. What are the values of equilibrium interest rate and investment spending?
Interest rate:
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