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Function of Money Markets
The money markets are the place where money is "wholesaled". As such the supply of money and interest rate which are of significance to the whole economy is determined there.
It is also used by the central bank to make its monetary policy effective.
Assume that input prices are constant at r = 1, w = 1, with technology which consists of 5 processes having the following properties: Process Inputs Capital (machine hours)
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Explain baumol''s static model
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