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Q. The money demand as well as curve is given by the following equation: Md = 5,000 - 10,000r + 5Y Md is money demand as well as, r is the real interest rate, as well as Y is aggregate income.
a) Why does the equation have a negative value for the second term as well as a positive value for the third term?
b) Assume that the equilibrium interest rate is 30% (r = 0.3). Calculate money demand as well as. Assume Y = 5,000. At the existing interest rate, there is an excess (demand as well as/supply) of money?
c) What will be the new equilibrium interest rate?
d) How much must the money supply increase to restore the original interest rate (r=0.3)?
e) The required reserve ratio is 10%. How great an open market purchase or sale of securities should the central bank undertake to restore the original interest rate (i.e. what is the values of purchase/sale of bonds)?
If an economy experiences increasing prospect costs with respect to two goods, then the production-possibilities curve between the two goods will be.
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In The Wealth of Nations, Adam Smith wrote, "Every individual endeavors to employ his capital so that its produce may be of greatest value. He generally neither intends to promote the public interest, nor knows how much he is promoting it.
determine what sales price must be obtained at the end of that period in order for Amjay to break even, when the interest is 12 percent.
The money made when the equipment is sold in not included in the last year's cash flow. It is incorrect. The after-tax cash flow is wrong.
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Suppose the demand for honey is given by Q=500-4p. Also, suppose there are 80 honey producers in the market. What is the equilibrium price of honey?
q1. assume that a doctor who lives alone hires the services of a maid also pays her 15000 a year to clean his house.
The effect of trade sanctions imposed on Iraq limiting Iraq's production of oil after the 1990 Gulf War on the oil market is best shown graphically with a price ceiling below equilibrium price.
Think our company should take advantage of economies of scale by increasing our output, thereby spreading out our overhead costs.
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