Consider the following economy withreal money, Ask an Expert

Economics

Consider the following economy with:

Real Money demand (M/p)^d = – 12 R + 0.40 Y

Real Money supply () (M^s/p) = 4500

a. Derive the LM curve

b. Derive the LM curve when the money supply increases by 500.

c. Derive the LM curve when money supply decreases by 10%

d. Find the value of money demanded when income Y = 15,000 and interest rate R = 5. Is this equilibrium? Why? Why not?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91566072

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