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Should it set the supply of money

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Reference no: EM131220464

The demand for money in a country is given by Md = RY (0.3-i), where RY = 120 and the supply of money is R30.

a. What is the equilibrium interest rate?

b. If the central bank wants to decrease i by 2%, at what level should it set the supply of money?

Reference no: EM131220464

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