Suppose that the money supply is equal to 500 billion and, Business Economics

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Suppose that the money supply is equal to 500 billion and

Suppose that the money supply is equal to $500 Billion and the demand for money is given by M ^d= 1000-100R, where R is the interest rate in percentages. If the demand for money increases by 5%, what would be the size and direction of an open market operation by the Central Bank to maintain the same interest rate as before? Solve the problem algebraically and present graph associated with your solution.

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Business Economics: Suppose that the money supply is equal to 500 billion and

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