M&B3 3rd Edition by Dean Croushore

تمرين 16

Suppose that the money-demand equation is :

Suppose initially that P = 1, Y = 7,000, and i = 5. If Y falls to 6,500 and the price level does not change, by how much should the Fed change the money supply if it wants to keep the nominal interest rate unchanged Should the money supply rise or fall, and by how much Use the liquidity-preference framework.