Let L(Y, r+)=1000+0.2Y-1000 (r+) and -10%. If the money supply equals M-3000 and price level P=1.5,...

  

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Let L(Y, r+)=1000+0.2Y-1000 (r+) and -10%. If the money supply equals M-3000 and price level P=1.5, what is the relationship between r and Y that clears the money market (i.e., what is the LM curve)? Let L(Y, r+)=1000+0.2Y-1000 (r+) and -10%. If the money supply equals M-3000 and price level P=1.5, what is the relationship between r and Y that clears the money market (i.e., what is the LM curve)?

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To find the LM curve we need to locate the aggregate of r and Y that equates the demand for money L ... View the full answer