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Macroeconomics Let us derive an aggregate-demand curve starting from some money demand and money supply equations. Assume the money-demand curve is MD-150 - 15r +

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Macroeconomics

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Let us derive an aggregate-demand curve starting from some money demand and money supply equations. Assume the money-demand curve is MD-150 - 15r + Y, the price level depends on r according to the equation P - 100 10r, and the money supply is MS - 100. Find the relationship between the price level P and output Y and show that the relation that you have found is an aggregate demand function. (HINT: you'll want to find Y as a function of P). (2 marks total)

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