Question: 2. Suppose that the money demand function is Ma P = 800 - 50r where r is the interest rate in percent. The money supply

2. Suppose that the money demand function is Ma P = 800 - 50r where r is the interest rate in percent. The money supply M is 2000 and the price level P is fixed at 5. a. Graph the supply and demand for real money balances. b. What is the equilibrium interest rate? c. What happens to the equilibrium interest rate if the supply of money is reduced from 2000 to 1500

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