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Question: problem 5 supplement the following graph assuming that the money...

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Problem 5. Supplement the following graph, assuming that the money demand function (i.e. the demand for loans) is given by MD-PC100-icom), where P is the price level and icom is the market interest rate in percentage points. The nominal interest rate set by the central bank is 5%, the mark- up of the commercial banks is 3 percentage points and the reserve ratio is 10%. The price level equals 2. What is the money supply in equilibrium? What is the amount of reserves? Reserves Loans Deposits
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