C-
In the CSM - Wachtel Chapter 3 (p. 179)
Q. 3 (T/F)
The economy is in equilibrium when desired savings equals desired investment.
Answer
(TRUE)
My question is:
While this is true for the goods market, is it also true for the money market?
My assumption:
Based on the answer given by CSM, because "the goods and money markets interact to determine the equilibrium values for both output and interest rates." it is true . . . is my reasoning correct?
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In the CSM - Wachtel Chapter 3 (p. 187)
Q. 13 (T/F)
Economists who favor a monotarist approach to economics believe there exists a strong relationship between money demand and interest rates.
Answer
(FALSE):
According to the CSM, "they place little importance on this relationship"
Can anyone shed light on why this is???
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In the CSM - Wachtel Chapter 3 (p. 189)
Any one else find Question 9 to be confusing???
Question 3 makes sense, but I can't seem to make the connection between the two . . .
CAN ANYONE HELP?
Thanks
C-
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