Assume that money demand is given by (M/P)^d=Y- 200r, and (M/P)^sequals 1,000.

a.

Write theLMcurve two ways, expressingYas a function ofrandras a function ofY.

b.

Ifris 3 percent, what isYalong theLMcurve? Ifris 5 percent, what isYalong theLMcurve?

d.

IfM/Pincreases, does theLMcurve shift upward and to the left or downward and to the right?

e.

IfMdecreases andPis constant, does theLMcurve shift upward and to the left or downward and to the right?

f.

IfPincreases andMis constant, does theLMcurve shift upward and to the left or downward and to the right?