(Continued with question 1 in exercise for chapter 3). Suppose instead of given 2000 there is an investment function which takes the form Above, i is the interest rate. Meanwhile there is a demand function for money Md=1.2Y-20000i Assume that the monetary base is equal to 2000 while the required reserve ratio is 1 ). What is the equilibrium level of output Y and interest rate?

When in 1920 I resumed my studies of theoretical physics which had long been interrupted by circumstances beyond my control, I was far from the idea that my studies would bring me several years later to receive such a higl and envied prize as that awarded by the Swedish Academy of Sciences each year to a scientist: the Nobel Prize for Physics. What at that time drew me towards theoretical physics was not the hope that such a high distinction