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Assuming that Md=$Y(.85 - 3i) and income is $70Billion, the people hold 35% in currency, the reserve ratio is 12% and the monetary base = 15Million. Show the computation for your answer.
1.What is the demand for currency?
2.What is the demand for checkable deposits?
3.What is the demand for reserves?
4.What is the demand for central bank money?
5.What is the overall demand for money?
6.What is the equilibrium level of interest rate?
7.Prove that the overall supply of money is equal to the overall demand for money at the equilibrium level of interest rate.
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Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"
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