Multiple Choice
Suppose the real money demand function is
Md/P = 2400 + 0.2 Y - 10,000 (r + ?e) .
Assume M = 5000,P = 2.0,and ?e = .03.If Y were to increase from 4000 to 5000,then the real interest rate would increase by how many percentage points?
A) 2
B) 4
C) 5
D) 7
Correct Answer:
Verified
Correct Answer:
Verified
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