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5. Assume GDP deflator = 1 and nominal money stock = RM1.5 trillion. If the demand function for real money is a straight line function,
5. Assume GDP deflator = 1 and nominal money stock = RM1.5 trillion. If the demand function for real money is a straight line function, Md = 0.9y - 80r, what is the economic equation for the LM curve. Prove your answer. 6. Using the information from question (5), if Y = RM 7 trillion, what is the equilibrium value of the nominal interest rate?
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Macroeconomics Principles and Applications
Authors: Robert E. Hall, Marc Lieberman
6th edition
1111822352, 1111822354, 9781133708742 , 978-1111822354
