Assume the money market for the economy of San Pedro is in equilibrium.
a)Using a diagram,graphically illustrate equilibrium in the money market.
b)Now suppose there is an increase in the money supply.Explain and illustrate in the same diagram (in part a),the effect on an increase in the money supply.

Question

Quizplus · Accepted Answer

The Answer of Assume the money market for the economy of San Pedro is in equilibrium.
a)Using a diagram,graphically illustrate equilibrium in the money market.
b)Now suppose there is an increase in the money supply.Explain and illustrate in the same diagram (in part a),the effect on an increase in the money supply.

Assume the Money Market for the Economy of San Pedro