ECO202Y1 Lecture : eco202 assignment 4 and self-generated solutions.pdf
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8- a- suppose money demand is given by md = (0. 25-i). Why? i)- md = . (0. 5-2i) ii)- md = (0. 25-i)/2 md = /2 (0. 25-i) Disclaimer: these solutions are just guidelines for you, and may not include a complete solution for the questions and problems in your homework, as you must present in your assignments and/or exams. In your solutions you must show your work, and demonstrate your line of thinking clearly. Please, always check my calculations for unintentional typos or miscalculations. Income is a flow variable, while wealth is a stock variable: false. Changes in interest rate can change the opportunity cost of holding money, so the demand for money: if the total wealth and demand for money are known, then the difference would determine the demand for bonds, true. They can increase the money velocity. (see the example below: false. Because l(i) is an decreasing function in i.