8. Suppose that the demand for real money balances depends on disposable income. That is, the money...

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8. Suppose that the demand for real money balances depends on disposable income. That is, the money demand function is M/P = L(r, Y −T).

Using the IS–LM model, discuss whether this change in the money demand function alters the following:

a. The analysis of changes in government purchases.

b. The analysis of changes in taxes.

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Macroeconomics

ISBN: 9781429218870

7th Edition

Authors: N. Gregory Mankiw

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Question Posted: Sep 27, 2024 09:00 AM

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8. Suppose that the demand for real money balances depends on disposable income. That is, the money...

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Macroeconomics

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