The demand for money is given by Md $YL(i), where L(i) (03i), $Y 120 and the supply of money Ms is a quarter of $Y a What is the equilibrium interest rate b If the central bank wants to decrease i by 2, at what level should it set the supply of money c If the people hold 25 in cash and the rest of the money in demand deposits with the banks holding 20 in reserve requirements what would be the Hs supply of highpowered money

Answer rating: 100% (QA)

Md Y Li Ms Y 4 Li 310i Y 120 a Equilibrium interest ra... View the full answer