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Consider the following economy with: Real Money demand 〖 (M/P)〗^d = – 12 R + 0.38...

Consider the following economy with: Real Money demand 〖 (M/P)〗^d = – 12 R + 0.38 Y Real Money supply (M^s/P)= 4510 Derive the LM curve Derive the LM curve when the money supply increases by 680. Derive the LM curve when money supply decreases by 12% Compare the LM curves from a, b and c by graphing them using any graphing tool (excel preferably). Comment on the differences. 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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Rahul Sunny answered 1 year ago
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