Answer: The nominal money supply should set at 1,600.
Explanation:
Given that,
Money demand function: (M/P)d = 2,200 – 200r
r - Interest rate
Money supply (M) = 2,000
Price level (P) = 2
If the fed wants to set the interest rate at 7% then,
Money supply = money demand
= 
= 2,200 – 200r
P = 2 and r = 7%
= 2,200 – 200 × 7
M = 800 × 2
M = 1,600
The nominal money supply should set at 1,600.
A rise in the domestic real interest rate would cause a fall in net exports and a RISE in the exchange rate.
In general, businesses and consumers spend less when interest rates are high. This is because borrowing money costs more when interest rates are high. As a result, companies frequently turn to the stock market to raise money, which can cause stock values to decline.
An increase in interest rates causes the local currency to appreciate. In comparison to domestic goods and services, import prices decline. Exports see a decline in profitability and competition. Exports decline while imports rise, reducing the net export portion of total demand and spending.
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Answer:
C. 2 percent.
Explanation:
The computation of the annual real rate of interest is presented below:
Provided that
Nominal annual interest rate = 8%
Inflation rate = 5%
So, the annual real rate of interest is
Real rate of return = {( 1 + nominal annual rate of return) ÷ ( 1 + inflation rate)} - 1
= {( 1 + 0.08) ÷ ( 1 + 0.05)} - 1
= 2%
Answer:
exists when there is an excess quantity of labor supplied.
Explanation:
Involuntary unemployment is the situtation in which the labor actually work and also work at the prescribed wage rate in that time when the job is not getting
It could be arise when there is a lacking of the aggregate demand or total demand also when there is a excess of labor supply
so according to the given situation, the second option is correct
Umm can someone answer this please because i need help on this as well
