Part 2 - Question 6 · Introducció a la Macroeconomia UPF 2018
Tema: Mercats financers: diner, bancs i política monetària · Del examen Final Exam - April 2018 (2018)
Enunciado
Part 2
Part 2 - Question 6 (0.25 points). Interest rate sensitivity of money demand
In money market, if economic agents demanding money are not very sensitive (so not react much) to changes in interest rate:
Solución
Según los criterios oficiales de corrección
In money market, if economic agents demanding money are not very sensitive (so not react much) to changes in interest rate:
Solución: b. The Money demand function should be relatively steep (rigid) and an increase in Money Supply will derive into a large decrease in the interest rate in equilibrium.
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