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Graph the supply and demand for the real money balance

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Reference no: EM132601155

Money demand and money supply is given by ( M/P)d=1000r and (M/P)s=1000 and the price level is 2

i. Graph the supply and demand for the real money balance?

ii. What is equilibrium interest rate?

iii. What happens to equilibrium interest rate if the supply of money is rasised from 1000 to 1200

Reference no: EM132601155

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