Carefully explain the impact on the money demand curve, money supply curve, equilibrium interest rate and the
Question:
Carefully explain the impact on the money demand curve, money supply curve, equilibrium interest rate and the quantity of money due to each of the following:
The economy grows (GDP increases) but the central bank moves to keep interest rates constant
1.Impact on money supply curve?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
2.Impact on money demand curve?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
3.Impact on equilibrium interest rate?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
4.Impact on quantity of money?
a.) Unchanged
b.) Increase
c.) Shift inwards/ to the left
d.) Shift outwards/to the right
e.) Decrease
Probability & Statistics for Engineers & Scientists
ISBN: 978-0130415295
7th Edition
Authors: Ronald E. Walpole, Raymond H. Myers, Sharon L. Myers, Keying