Suppose the liquidity preference function is given by L(I,Y) = Y/8 - 1,000i Use the money demand
Question:
Suppose the liquidity preference function is given by
L(I,Y) = Y/8 - 1,000i
Use the money demand equation, along with the following table of values, to calculate the velocity for each period.
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Period2 Period3 Period4 Period5 Period6 Period7 Periodl 0.05 0.07 Interest rate 0.03 0.05 0.07 0.06 0.04
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