hw7f11 (1) - Print name_ _ Sign name Econ 520 F11 Homework...

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Print name___________________ Sign name _____________________ Econ 520 F11 Homework 7 11/1, 11/3, due 11/4 For full credit, show your calculations on each computational problem. 1. (10 HW points) Using the Money and Credit model in M&B Chapter 19, what effect will a one-time decrease in the supply of money will have on the equilibrium real interest rate? Assume zero inflationary expectations for simplicity. a) increase b) decrease c) no effect one way or the other 2 (10 HW points) What temporary effect will a one-time decrease in the supply of money have on real interest rates? Assume zero inflationary expectations for simplicity. a) increase b) decrease c) no effect one way or the other 3. (10 HW points) Assuming Adaptive Learning, holding the real interest rate permanently below its equilibrium value requires a) a one-time increase in the money supply b) a one-time decrease in the money supply c) a steady rate of growth in the money supply d) a steady rate of decrease in the money supply
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This note was uploaded on 11/20/2011 for the course FINANCE 640,722 taught by Professor Chabiyo,reeves during the Fall '11 term at Ohio State.

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hw7f11 (1) - Print name_ _ Sign name Econ 520 F11 Homework...

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