Question 3 a) What are the functions of money? b) Draw diagrams illustrating the impact on the demand for money, the supply of money and the equilibrium interest rate, of each of the following....

Question    3
a) What    are    the    functions    of    money?
b) Draw    diagrams    illustrating    the    impact    on    the    demand    for    money,    the
supply    of money    and    the    equilibrium    interest    rate,    of    each    of    the    following.
Explain    what    is    going    on in    the    money    market    in    each    case.
(i) The    central    bank    sells    securities    on    the    open    market
(ii) The    economy    grows    (GDP    increases)    but    the    central    bank    moves    to
keep    interest    rates    constant.