Solution-Derive the lm curve, Consider the following

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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?

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