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The following part is related to the money growth and ination. Now start with a general form of money demand function: Md =L(Y,r+3re) (5) P
The following part is related to the money growth and ination. Now start with a general form of money demand function: Md =L(Y,r+3re) (5) P (d) Suppose the economy is in longrun steady state equilibrium where output growth is 5%, ination is 1%, and the interest rate is constant. If the money supply is growing by 4%, what would be the income elasticity of money demand in this economy
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