Question: Use the LM curve from the previous two problems to decide whether agents experience an excess supply or excess demand with respect to their money

Use the LM curve from the previous two problems to decide whether agents experience an excess supply or excess demand with respect to their money holdings when the interest rate is .08 per year and the level of income is $1000 per year. Describe their response in the bond market, and the effect this will have on the price of bonds and the interest rate.

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