Answer to Question #152534 in Macroeconomics for Rafayet

Question

Draw the supply and demand for real money balances and explain what will happen to the
equilibrium interest rate and real money balances in the following cases?
a) People are receiving more income.
b) There is an increase in the use of ATM machine.
c) There is a decrease in the use of credit card.
d) Bangladesh bank has decided to decrease supply of real money balances.
e) Price level has increased by 5%

Answer 1

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