Question: A normal L M curve can be derived from the quantity equation if it is assumed that: a . a higher interest rate reduces money
A normal curve can be derived from the quantity equation if it is assumed that: a a higher interest rate reduces money demand and raises velocity. b a higher interest rate reduces both money demand and velocity. c velocity is constant. d the price level is constant. At the intersection of the IS and curves: a actual expenditure is equal to planned expenditure. b real money supply is equal to real money demand. c the levels of and satisfy both the goods market equilibrium condition and the money market equilibrium condition. all of the above.
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