Blog

Real money demand in the economy is given by L = 0.5Y – 2500i,where Y is real income and i is the nominal interest rate. In equilibrium, real money demand L equals real money supply M/P. Suppose that Y equals 1000 and the real interest rate is 0.02. At what rate of inflation is seignorage maximized?

The total value of government bonds outstanding at any particular time is called the

When the nominal exchange rate in terms of dollars per yen rises,

If the real exchange rate rises 2%, domestic inflation is 3%, and foreign inflation is 1%, what is the percent change in the nominal exchange rate?

If the deficit is 0.02 times GDP, the existing debt/GDP ratio is 0.5, and the growth rate of nominal GDP is 0.03, then the change in the debt-GDP ratio is

Goods market equilibrium in the open economy occurs when

If the real exchange rate rises 4%, domestic inflation is 2%, and foreign inflation is 0%, what is the percent change in the nominal exchange rate?

Which of the following is the Federal Reserve most likely to use to change the nation’s money supply?

The largest liability of the Fed from those on this list is

Vault cash is equal to $2 million, deposits by depository institutions at the central bank are $1 million, the monetary base is $15 million, and bank deposits are $30 million. Bank reserves are equal to