Suppose the money market for some hypothetical economy is given by the following graph, which plots the money demand and money supply curves. Assume the central bank in this economy (the Fed) fixes the quantity of money supplied. Suppose the price level increases from 90 to 105. Shift the appropriate curve on the graph to show the impact of an increase in the overall price level on the market for money. Following the price level increase, the quantity of money demanded at the initial interest rate of

A graph in discrete mathematics is composed of a collection of points known as vertices, and the joining lines between both vertex are known as edges. Bipartite graphs, weighted graphs, directed and undirected graphs, linked and unconnected graphs, and simple graphs are only a few of the several types of graphs.

Here,

The answer the following questions are :

a)Increase in price level is due to increased demand for money in the economy . So the money demanded curve would shift to right

b)Greater increased price level increases the demand for money.

c)increase : this is because more money in hand per daily transactions clue to higher price

d)sell band so as to get liquid cash in hand for transaction purpose.

e) Have to offer higher interest rates to attract the buyers.

f)12% equilibrium where the new money demands equal to money supply.

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