Question: Question 15 Within liquidity framework, show how the interest rate can be determined using money demand and money supply. Why do you think money demand

Question 15 Within liquidity framework, show how the interest rate can

Question 15 Within liquidity framework, show how the interest rate can be determined using money demand and money supply. Why do you think money demand curve downward sloping while money supply curves vertical? What will happen to interest rate in if the income effect is greater than liquidity effect? Show this using MD and MS curves

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