Question: Question 16 *Correct answers will receive 1 mark. Incorrect answers will receive -0.5 mark. An answer left blank will Not yet receive 0 marks. So

the opportunity cost of holding money changes from 8% to 2%. Given

this trend, all else being equal, we would 1.00 think that the

Question 16 *Correct answers will receive 1 mark. Incorrect answers will receive -0.5 mark. An answer left blank will Not yet receive 0 marks. So decide carefully before you answer.""* answered Marked out of As the opportunity cost of holding money changes from 8% to 2%. Given this trend, all else being equal, we would 1.00 think that the effect on the money demand would look like: F Flag D question MS MDI MD1 Q a. True O b. FalseQuestion 17 Suppose that you have the market for loanable funds is originally in equilibrium with zero government debt. The Not yet loanable funds market is represented by the following demand and supply functions. answered Demand: r = 8 - 0.0030 Marked out of Supply: r = 0.0020 200 The government then runs a deficit and it changes the supply curve to: P Flag r=1+ 0.002Q question Calculate the amount of crowding out in the economy. Answer:Question 18 Suppose that there is an economy with the AD and AS functions below: Not yet answered AD: P = 6700 - 2Y SRAS: P = 500 + 2Y LRAS: 1000 Marked out of Calculate the recessionary or inflationary gap. 2.00 T Flag

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