Instructions: In the investment demand graph, use the tool provided 'lnvestment' to plot a new level of investment demand. Investment Demand 11 Tools 10 9. Investment 8. 4 1 2 4 6. 8. 10 12 14 16 18...

Extracted text: Instructions: In the investment demand graph, use the tool provided 'lnvestment' to plot a new level of investment demand. Investment Demand 11 Tools 10 9. Investment 8. 4 1 2 4 6. 8. 10 12 14 16 18 20 Quantity of Investment (billions of dollars) Interest Rate (percent) 3.


Extracted text: The money market in the United States, the investment demand, aggregate demand, and aggregate supply curves are as shown in the graphs below. Currently, the Federal Reserve has a money supply of $120 billion and the money market is in equilibrium. a. Suppose the Federal Reserve decreases the money supply by $60 billion. Use the money market, investment demand, and AD/AS graphs to show the effects of the decrease in the money supply on interest rates and money demand, investment, and in the AD/AS model.