1. Graph an economy in long run equilibrium.
a.) Now assume that banks may pay interest on checking accounts which makes holding money more attractive. How does this affect the demand for money? What happens to the velocity of money and why? Show this change on your graph. What...
2.Given a closed economy, apply Keynesian Cross analysis to the following:
C = 200 + 2/3(Y-T)
I = 300
G = 300
T = 300
a.If Y = 1500, what is planned expenditure...
