EC 201 SEMESTER 1 2010 - TUTORIAL 7 TOPIC 8 THE DEMAND FOR MONEY PROBLEM SETS FROM TEXTBOOK: Rudiger Dornbusch, Philip Bodman, Mark Crosby, Stanley Fischer, and Richard Startz, Macroeconomics , Edition 2, McGraw-Hill Australia Publishers, 2006. (pp 405-406) Conceptual: 5, 6, 8 Technical: 1, 2 Additional Questions: 1. ‘The real interest rate is the opportunity cost of holding money.’ Comment on this statement. 2. According to the classical quantity theory of money, any decrease in nominal money supply will lead to a decrease in the unemployment rate.’ Comment on this statement. 3. ‘Financial innovation raises the velocity of money.’ Comment on this statement.
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This note was uploaded on 05/16/2010 for the course ECON 101 taught by Professor As during the Spring '10 term at University of Southern Maine.