Answer to Question #281933 in Macroeconomics for Tabi

Question

Given the money demand function, [M P] a bi Y D ln = − + ln , if b = 1 3 and S = 0.03Y , what rate of

money growth is required to obtain it? How will your answer(s) change when: (a) b = 1 3 and S = 0.05Y

Explain the relationship between seigniorage revenues and the rate of inflation. Als

Answer 1

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