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QUESTION 3 Money demand is M^d=P*(100+0.06*Y-100i), where Y=3000, r=4%, expected inflation rate =1%. If the money...

QUESTION 3

  1. Money demand is M^d=P*(100+0.06*Y-100i), where Y=3000, r=4%, expected inflation rate =1%. If the money supply is 1075, what is the equilibrium price that clears the asset market?

    less than or equal to 3.5

    greater than 3.5 and less than or equal to 4.0

    greater than 4.0 and less than or equal to 4.5

    greater than 4.5 and less than or equal to 5.0

    greater than 5.0
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