5. (Appendix 9.B) Recall from Chapter 7 that an increase in i , m the nominal interest rate on money, increases the demand for money. To capture that effect, let’s replace Eq. (9.B.17) with M

P d

0

ℓ ℓ ℓ

= + − + −

Y r i .

π

Y r e m

( )

How does this modification change the solutions for the general equilibrium values of the variables dis cussed in Appendix 9.B, including employment, the real wage, output, the real interest rate, and the price level?