Question: The real money demand function is 1,829 + 0.2Y - 10,000 (E(r) + E()). Furthermore, let nominal money supply be equal to 3,333, the price
The real money demand function is 1,829 + 0.2Y - 10,000 (E(r) + E()). Furthermore, let nominal money supply be equal to 3,333, the price level to 2, the expected inflation E() = .05, and the real output Y = 5000. The expected real interest rate (E(r)) that makes money supply equal to money demand is ________. (Submit your answer with up to two decimals and in percent terms, i.e., 10.22 for 10.22% and 11.44 for 11.442%.)
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