Presume real output is 12500 and the demand for real money


Presume real output is 12,500, and the demand for real money balances is Md/P = Y/4 - 125i. If the equilibrium interest rate is 7 %, compute the money supply. If the central bank sets the interest rate at 8 % what is the new money supply?

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Microeconomics: Presume real output is 12500 and the demand for real money
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