Answer to Question #288505 in Macroeconomics for Ajs

Question #288505

Assume an economy where money demand varies directly with real income and inversely with nominal interest rate. What will happen to the price level in the economy today, if the central bank announces that it will decrease the money growth rate in the future while keeping the money supply unchanged?

Expert's answer

Low rates of money supply growth can cause GDP failures with low inflation.

Learn more about our help with Assignments: Macroeconomics

Comments

No comments. Be the first!

Leave a comment

Related Questions

Who Can Help Me with My Assignment

There are three certainties in this world: Death, Taxes and Homework Assignments. No matter where you study, and no matter…
How to Finish Assignments When You Can’t

Crunch time is coming, deadlines need to be met, essays need to be submitted, and tests should be studied for.…
How to Effectively Study for a Math Test

Numbers and figures are an essential part of our world, necessary for almost everything we do every day. As important…