1. What are the three motives for the demand for money in the Theory of Liquidity Preference? List them and give a brief description of each.Now, combine the three motives into a single equation for the demand for money.State the equation and explain in words each of the components of the equation.Lastly, is this equation "stable", meaning in this context that the function, once drawn, seldom changes?If so, is monetary policy to keep interest rates near a chosen target easy or hard.If not, if money demand is unstable, what does that mean for the ability of the Fed to stabilize interest rates near a chosen target?

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