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Can you explain to me how you would solve this question please Suppose that the demand for real money balances is: L(i,Y) = i -0.5
Can you explain to me how you would solve this question please
- Suppose that the demand for real money balances is:
L(i,Y) = i-0.5Y1.5
If real GDP goes from $100 billion to $110 billion then the demand for real balances:
A) Increases by 15%
B) Decreases by 15%
C) Increases by 1.5%
D) Decreases by 15%
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