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Derive the lm curve

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Reference no: EM132324771

Consider the following economy with:  Real Money demand  (M/P)^d = - 12 R + 0.38 Y; Real Money supply  (M^s/P)= 4510

a) Derive the LM curve

b) Derive the LM curve when the money supply increases by 680.

c) Derive the LM curve when money supply decreases by 12%

d) Compare the LM curves from a, b and c by graphing them using any graphing tool (excel preferably). Comment on the differences.

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

Reference no: EM132324771

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