Question: 1. Explain how partial crowding out works. 2. Graph #1 3. Explain how government deficit spending decreases the quantity of loanable funds. 4. Graph #3

1. Explain how partial crowding out works.

2. Graph #1

3. Explain how government deficit spending decreases the quantity of loanable funds.

4. Graph #3

5. Explain the relationship between money supply and prices (inflation). Hint: use the velocity formula.

6. Find the estimated M1 (money 1) and explain what the number means.

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