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Relationship between the mp curve

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a. Show graphically the relationship between the MP Curve, the IS Curve, and the Aggregate Demand Curve. Explain briefly this relationship.

b. Suppose the monetary policy curve is given by r= 1.5 + .75(pi) and the IS curve by Y=13-r. Solve for aggregate demand.

c. How do nominal interest rate create excess supply and excess demand in the Money Market model? Explain and show graphically.

Reference no: EM132603636

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