Essay
Compare the classical model of money market with the liquidity preference model.
a. Are they consistent with each other?
b. Draw the classical money-demand curve in a Price-Quantity-of-money diagram.
c. How does your money-demand curve shift when income, Y, increases?
d. Use your classical money-demand diagram to derive an aggregate-demand curve.
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a. Both models use a money-demand and a ...View Answer
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