Question 1 (d)
Money Supply in the graph of the money market is vertical
Question 1 (e)
- Higher interest rate decreases investment and interest-sensitive consumption spending, and that both consumption and investment are components of aggregate demand.
Question 1 (f)
Question 2 (b)
Question 3 (a)
- Maximum change in money supply = Initial deposit / RRR - Initial deposit
Question 3 (c)
Inflation will decrease the value of real wages.