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Q. Peggy-sue's cookies are the best in the world, or so I hear. She has been offered a job by Cookie Monster, Inc., to come to work for them at $125,000 per year. Currently, she is producing her own cookies, and she has revenues of $260,000 per year. Her costs are $40,000 for labor, $10,000 for rent, $35,000 for ingredients, and $5,000 for utilities. She has $100,000 of her own money invested in the operation, which, if she leaves, can be sold for $40,000 that she can invest at 10 percent per year.
This question uses the general monetary model, where L is no longer assumed constant.
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Assuming no other changes, if balances in money market deposit accounts increase by $50 billion and small-denominated time deposits decrease by $50 billion.
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Afterward on same day Jane Harris discussed a loan for $5400 at same bank. Exemplify after these transactions, the supply of money.
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