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Business, 06.05.2020 07:12 amandasantiago2001

Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. The money supply M is 2,000, and the price level P is 2. If the price level is fixed and the supply of money is raised to 2,800, then the equilibrium interest rate will:
A. drop by 4 percent
B. drop by 2 percent
C. drop by 1 percent
D. remain unchanged

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Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in pe...
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