The following graph shows the market for bank reserves in a hypothetical economy. Suppose the price level increases from 70 to 100. Shift the appropriate curve on the following graph to show the impact of an increase in the overall price level. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back o its original position, just drag it a little farther. ? INTEREST RATE (Percent) 5 N 0 0 Supply Demand 10 30 40 50 QUANTITY OF BANK RESERVES (Billions of dollars) Quantity of bank reserves supplied Quantity of investment demanded 60 Demand Supply Analyze the effects of this change in the price level, then fill in the following table with these results. Effect Increases Decreases

The following graph shows the market for bank reserves in a hypothetical economy. Suppose the price level increases from 70 to 100. Shift the appropriate curve on the following graph to show the impact of an increase in the overall price level. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back o its original position, just drag it a little farther. ? INTEREST RATE (Percent) 5 N 0 0 Supply Demand 10 30 40 50 QUANTITY OF BANK RESERVES (Billions of dollars) Quantity of bank reserves supplied Quantity of investment demanded 60 Demand Supply Analyze the effects of this change in the price level, then fill in the following table with these results. Effect Increases Decreases

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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