11. Consider the money demand in the money market model.

11.a. Regarding the real income Y, choose the correct words below. "When real income Y falls, real money demand (increases / decreases). When real income Y rises, nominal money demand (increases / decreases)."

11.b. Suppose that the real money demand is L(R,Y) = 300 and the nominal money demand is Md = 1500. Answer the price P.

11.c. The interest rate changed. Because of the change, the real money demand fell. Answer How the interest rate changed: Increased or Decreased, and how the nominal money demand would change: Increase or Decrease.

Change in Interest rate:

Nominal money demand: