Problem 4.2 Md = $Y(.35-i) where $Y = $60,000 per year and wealth = $50,000, split between M and B Md and Bd when i =.05? When i = .10? How do Md and Bd change when i changes? (ΔMd/Md) / (Δ$Y/$Y) when (Δ$Y/$Y) = -50% & i .10? (ΔMd/Md) / (Δ$Y/$Y) when (Δ$Y/$Y) = -50% & i .05? How does income elasticity of money demand depend on the interest rate? Confirm algebraically.

Problem 4.6 Md = $Y(.8-4i) where $Y = $5 Tril. per year Hs = $100 bil. c = Cu/D = 0 and Θ = R/D = .1 Hd = ? i = ? Ms = ? Δ Hs = + $200 bil.  i = ? Ms = $3,000 bil.  i = ?