Use the below graphs to answer the following questions assuming the nominal GDP in the economy is

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Use the below graphs to answer the following questions assuming the nominal GDP in the economy is given.

(a) Look at graph A and suppose the supply of money increases from 100 to 200. What will be the equilibrium rate of interest?

(b) Look at graph B which shows an investment-demand curve for this economy. Given the answer to part (a) above, how much will investors plan to spend on capital goods?

(d) Now trace what will happen in parts (a)?(c) if the money supply increases to $300.

Related Book For answer-question

Macroeconomics

ISBN: 978-0138014919

12th edition

Authors: Robert J Gordon

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Posted Date: Aug 29, 2018 08:17 AM

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Use the below graphs to answer the following questions assuming the nominal GDP in the economy is

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a 6 b 10 c Aggregate demand will increase by a mu... View the full answer

Macroeconomics

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