Answer Blanks: 1. 5.25%, 5.00%, 5.75%, 5.50%, 6.00% 2. 5.25%, 5.75%, 6.00%, 5.50

Question

Answer Blanks:

1. 5.25%, 5.00%, 5.75%, 5.50%, 6.00%

2. 5.25%, 5.75%, 6.00%, 5.50%, 6.25%

3. Increase, decrease

4. $0.9 trillion, $0.7 trillion, $1.1 trillion, $1.2 trillion, $1.0 trillion, $0.8 trillion

5. Rapidly increasing the money supply causes hyperinflation, investment responds to changes in the interest rate, markets prefer low inflation to stable interest rates

6. Rate of growth in the money supply, level of M1, interest rate, level of M2

Could you show me how to graph the points and what the graph should look like please? Thank you :)

The following graph shows an increase in the demand for money from 2020 to 2021 caused by an increase in aggregate output INTEREST RATE (Percent] 6.75 No Intervention Money Supply 6.50 6.25 New MS Cve 6.00 With Intervention 5.75 Money eman 2021 5.50 5.25 5.00 eman 2020 4.75 0.6 0.7 0.8 0.9 1.0 1.1 1.3 1.4 QUANTITY OF MONEY (Trillions of dollars HelpClear All dollars) ela Clear AlL Clear ALL The initial equilibrium interest rate in 2020 was to alter the money supply between 2020 and 2021. On the previous graph, use the red point (cross symbol) to illustrate the equilibrium interest rate and quantity of money that would result from this lack of intervention. In this scenario, the equilibrium interest rate in 2021 would be . Suppose the Federal Reserve (the Fed) chooses not

Explanation / Answer

5.5%,

6%

Increase money supply

Level of investment

Rapidly increaseing money supply causes inflation,

investment responds to changes in the interest rate,

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