« previous next »

Author Question: Explain why one can write the demand for money as the price level times a function of the interest ... (Read 68 times)

saraeharris

  • Hero Member
  • *****
  • Posts: 546
on: Jun 30, 2018
Explain why one can write the demand for money as the price level times a function of the interest rate and real income as follows: = PxL (R, Y)
 
  What will be an ideal response?

Question 2

If the tariff on computers is not changed, but domestic computer producers shift from domestically produced semiconductors to imported components, then the effective rate of protection in the computer industry will
 
  A) increase.
  B) decrease
  C) remain the same.
  D) depend on whether computers are PCs or Supercomputers.
  E) no longer apply.


reelove4eva

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 30, 2018
Answer to Question 1

The aggregate money demand is proportional to the price level. Imagine that all prices in an economy doubled, but the interest rate and everyone's real incomes remained unchanged. Then, the money value of each individual's average daily transactions would simply double, as would the amount of money each wishes to hold.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

saraeharris

  • Hero Member
  • *****
  • Posts: 546
Reply #2 on: Jun 30, 2018
Thank you :)


reelove4eva

  • Sr. Member
  • ****
  • Posts: 332
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

People about to have surgery must tell their health care providers about all supplements they take.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

How to prove the derivative of the general logarithmic function How to prove the derivative of the general logarithmic function
Press with (A) fingertips into GB-30; or (B) with thumb into GB-30; press 2–3 times. Press with (A) fingertips into GB-30; or (B) with thumb into GB-30; press 2–3 times.
How to find the anti-derivative of a function (Part 2) How to find the anti-derivative of a function (Part 2)
How to transform the natural logarithmic function (ln⁡x) How to transform the natural logarithmic function (ln⁡x)
Economic recession in 2008 saw a small decrease in demand Economic recession in 2008 saw a small decrease in demand
Consider the following Lagrangian function: Z(I1,K2,λ) = F(K1,L1) - I1 - w1L1 ... Consider the following Lagrangian function: Z(I1,K2,λ) = F(K1,L1) - I1 - w1L1 ...
Video: Blood Flow through the Human Heart

For a complete list of videos, visit our video library