a. Decompose the liquidity preference demand for money function: M^d = D_t(PY) + D_a(R).

That is, what are the different reasons we wish to hold money and what are these reasons/demands determined by (or a "function of")?

And, in our model of the economy, "where" & how is the equilibrium interest rate determined?

b. Briefly explain withor withouta bit of maths, why bond prices & interest rates are inversely related.