Author Question: Explain why one can write the demand for money as the price level times a function of the interest ... (Read 69 times)

saraeharris

  • Hero Member
  • *****
  • Posts: 546
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
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


 

Did you know?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

If you use artificial sweeteners, such as cyclamates, your eyes may be more sensitive to light. Other factors that will make your eyes more sensitive to light include use of antibiotics, oral contraceptives, hypertension medications, diuretics, and antidiabetic medications.

Did you know?

Today, nearly 8 out of 10 pregnant women living with HIV (about 1.1 million), receive antiretrovirals.

Did you know?

Patients who cannot swallow may receive nutrition via a parenteral route—usually, a catheter is inserted through the chest into a large vein going into the heart.

For a complete list of videos, visit our video library