Calculating equilibrium interest rate
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Suppose the total demand for money is described by the following equation:
MD = 30-2i
where i is the prevailing market interest rate. The total supply of money is described by the following equation:
MS = 3 + 7i
According to liquidity preference, what is the equilibrium interest rate?
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Solution describes the steps to calculate equilibrium interest rate.
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According to liquidity preference, equilibrium interest rate is ...
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- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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