Real money demand function | Economics homework help
Document Preview: 1. Suppose the real money demand function is: Md/P ? 1500 ? 0.2 Y – 10,000 (r ? (e). Assume M ? 4000, P ? 2.0, (e ? 0.01, and Y ? 5000. Note: we are holding P and Y constant in this problem until we get to case #2, see below. a) What is the market clearing real interest rate? Show your […]