Suppose the money market for some hypothetical economy is given by the following graph, which plots the money demand and money supply curves. Assume the central bank in this economy (the Fed) fixes the quantity of money supplied. Suppose the price level decreases from 150 to 125.

Suppose the Federal Reserve (the US central bank) increases the money stock. Create a graph that explains the effect of the Fed's expansionary monetary policy in the Long Run.

how to calculate the equilibrium price.....

Suppose that money demand is given by the function MD=55+P, and the Bank of Canada maintains the supply of money at MS=$58b. If the Bank of Canada suddenly increases the money supply to MS'-$60b, what has happened to equilibrium value of money? a)It has decreased from 5 to 2 b)MD will shift, and the value of money will remain unchanged c)It has increased from 3 to 5 d) It has decreased from 1/3 to 1/5

how might this change in interest rates and the supply of money affect the value of money? What happens in the circular-flow-diagram if borrowing money becomes expensive for businesses and consumers? What happens to employment?

For the quantity theory of money (Mv=PY), if v and Y were fixed, what would an increase in M do to P?

According to Keynes, increasing the money supply should lower interest rates in the economy. Milton Friedman notes that while it is true that expansionary monetary policy can lower interest rates, it is only part of the story. a.    Briefly explain under what conditions an expansionary monetary policy will indeed lower interest rates, both in the short and long run. A graph may help answering this question.b.    Briefly explain under what conditions an expansionary monetary policy will increase interest rates. A graph may help answering this question.

The following diagram shows the Money Market for a hypothetical economy. Suppose that the economy begins with a Money Supply (Ms) of $300 million, and an equilibrium interest rate of 5.0%. Finally suppose that the required reserve ratio (rr) is 15%. Use the scenario to answer Questions 10 to 13. Interest rates (i) 5.5% 5% 4.5% Ms O increase the money supply $10 million O increase the money supply $100 million O decrease the money supply $300 million O decrease the money supply $200 million O decrease the money supply $100 million $200 $300 $350 Mp Quantity of Money (millions) Suppose that the Central Bank wished to raise the equilibrium interest rate up to 5.5%. In order to achieve this, it would need I to

Which of the following will most likely cause a decrease in the quantity of money demanded? Group of answer choices an increase in the interest rate an increase in the price level an increase in nominal aggregate output a decrease in the interest rate

Suppose the Federal Reserve (the US central bank) increases the money stock. Create a graph that explains the effect of the Fed's expansionary monetary policy in the Short Run.