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    Macroeconomics Study Set 60
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    Exam 11: Aggregate Demand I: Building the Islm Model
  5. Question
    Assume That Money Demand Is Given by (M / P)<sup>d</sup>
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Assume That Money Demand Is Given by (M / P)d

Question 67

Question 67

Essay

Assume that money demand is given by (M / P)d = 0.5Y - 100r, and (M / P)s equals 800.
a.Write the LM curve two ways, expressing Y as a function of r and r as a function of Y.

Correct Answer:

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