WhatsApp +1 (332) 244-5747

Money demand function

by | Jun 17, 2021 | Assignment

Suppose that a person’s yearly income is $60,000. Also suppose that this person’s money demand function is given by Md = $Y (0.35 ! i)•

a. What is this person’s demand for money when the interest rate is 5%?10%?

b. Explain how the interest rate affects money demand.

c. Suppose that the interest rate is 10%. In percentage terms, what happens to this person’s demand for money if her yearly income is reduced by 50%?

d. Suppose that the interest rate is 5%. In percentage terms, what happens to this person’s demand for money if her yearly income is reduced by 50%?• e. Summarize the effect of income on money demand. In percentage terms,how does this effect depend on the interest rate?

**Short answer questions! No need an essay for these questions.

Suppose that a person’s yearly income is $60,000. Also suppose that this person’s money demand function is given by Md = $Y (0.35 ! i)•a. This person’s demand for money when the interest…

Get your custom paper done at low prices

Y

275 words/page

Y

Double spacing

Y

Free formatting (APA, MLA, Chicago, Harvard and others)

Y

12 point Arial/Times New Roman font

Y

Free title page

Y

Free bibliography & reference

TESTIMONIALS

What Students Are Saying

Outstanding, thank you very much.

Undergraduate Student

English, Literature

Awesome. Will definitely use the service again.

Master's Student

Computer Science