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.    1. a) more b) less

2. a) more b) less

3. a) 1.33 b) 1 c) 0.33 d) 0.67

4. a) 1.5 b) 3 c) 1 d) 0.75

5. a) sell bonds to b) buy bonds from

6. a) greater b) less

7. a) increase b) reduce

8. a) fall b) rise

9. a) fall b) rise

Show transcribed image text The following table shows a money demand schedule, which is the quantity of money demanded at various price levels (P) in the fictional country of Zupp. Begin by filling in the Value of Money column. Price Level (P) Value of Money (1/P) Quantity of Money Demanded 0.75 \$1.5 billion \$2 billion 1.5 \$3.5 billion \$7 billion Now, consider the relationship between the price level and the quantity of money that people demand. The higher the price level, the 1 money the typical transaction requires, and the 2 money people will wish to hold in the form of currency or current deposits. Assume that the Reserve Bank of Zupp initially fixes the quantity of money supplied at \$3.5 billion. Use the orange line (square symbols) labelled Msi to plot the initial money supply set by the Reserve Bank of Zupp. Then, referring to the table above, use the blue line segments (circle symbols) to graph the money demand curve.

The following table shows a money demand schedule, which is the quantity of money demanded at various price levels (P) in the fictional country of Zupp. Begin by filling in the Value of Money column. Price Level (P) Value of Money (1/P) Quantity of Money Demanded 0.75 \$1.5 billion \$2 billion 1.5 \$3.5 billion \$7 billion Now, consider the relationship between the price level and the quantity of money that people demand. The higher the price level, the 1 money the typical transaction requires, and the 2 money people will wish to hold in the form of currency or current deposits. Assume that the Reserve Bank of Zupp initially fixes the quantity of money supplied at \$3.5 billion. Use the orange line (square symbols) labelled Msi to plot the initial money supply set by the Reserve Bank of Zupp. Then, referring to the table above, use the blue line segments (circle symbols) to graph the money demand curve.