If the money supply is given as 200 and money demand is given by the equation Md
ID: 1192012 • Letter: I
Question
If the money supply is given as 200 and money demand is given by the equation Md=50 + 0.15Y - 15r, then the LM curve will be
A) r = 25 + 0.01Y B) r = -10 + 2.25Y C) r = -10 + 0.01Y D) r = 10 + 0.01Y
According to Walrasian general equilibrium analysis, if Wealth = Money + Bonds and if there is excess demand for bonds at the current interest rate, then
A) the money market is in equilibrium. B) there is an excess supply of bonds. C) the money market is in disequilibrium. D) both markets are in equilibrium.
Explanation / Answer
1: B
2: D