1101-011Shert Quiz4 f17 Exzel Insrrt Draw Pagr laynut Formulas Data Rrview View
ID: 1110480 • Letter: 1
Question
1101-011Shert Quiz4 f17 Exzel Insrrt Draw Pagr laynut Formulas Data Rrview View Tell me what you want to do B 1 u , | E. Conditional rormat asl Neuual Fomatting-lable Sort & Find & Filter- Select Irsert Delete Fermat = = = t-E-Merge& Center , $ , % , to Calculation Check Cell Format Painter Clrar. Farng D30 47 0.068 23000000 4900000 72000000 B. Assume that "r" is the nominal interest rate in decimal form Suppose that Money Demand (MD) is given by the MD equation MD-1000-10000*r Fill in the columns below. (3) If the Fed changes the Money Supply (MS) from 350 to 750, by what % will the equilibrium interest rate change? MD MS1 MS2 0.02 0.025 0.03 0.035 0.04 0.045 0.05 0.055 0.06 0.065 0.07 0.075 0.08 750 700 650 600 550 61 450 400 63 300 250 200 70 71 3. The "Equation of Exchange" (5) Suppose that the US economy at various real interest rates has the real GDP values shown in the table below. Money velocity is 4 Suppose also that the price level is 1.65 Problems Mini-tutorial #- + 100% :50 PM Type here to searchExplanation / Answer
Initial interest rate where MD = MS1 = 350
r = 0.065
Final interest rate where MD = MS2 = 750
r = 0.025
% change in interest rate = 100 x (0.025 - 0.065)/0.065 = -61.54%
r MD MS1 MS2 0.02 800 350 750 0.025 750 350 750 0.03 700 350 750 0.035 650 350 750 0.04 600 350 750 0.045 550 350 750 0.05 500 350 750 0.055 450 350 750 0.06 400 350 750 0.065 350 350 750 0.07 300 350 750 0.075 250 350 750 0.08 200 350 750Related Questions
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