Question: Problem 2 ( 15 Points ) Explain what does the LM. schedule curve represents . Explain the relationship between real money stock and the LM

Problem 2 ( 15 Points )

  1. Explain what does the LM. schedule curve represents . Explain the relationship between real money stock and the LM schedule.
  2. Derive graphically the LM curve
  3. Explainwhat happen to the shift of the LM curve if the FED increases Money supplys

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