Monetary Policy and Money Markets
a. Graph the demand and supply of money at equilibrium. Identify
the area of excess supply of money and excess demand for money.
b.Graph the impact of contractionary monetary policy on
Aggregate Demand through monetary policy transmission into the
economy- use 3 graphs to illustrate the impact. Graph and list all
contractionary monetary policy.
c. Explain the transmission of expansionary monetary policy
transmission and list all expansionary monetary policy tools
d. Define the equation of exchange. What level of the money
supply will sustain Nominal GDP of $143 bill when velocity =3? (
round to 1 one decimal place)