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How would a regular lm curve be affected

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Reference no: EM13159239

a) How would a regular LM curve be affected if the private sector demand for money balances increased following heightened uncertainty about prospects for bonds?

b)what would an LM curve look like in a quantity theory world where velocity is fixed and is not impacted by intetrest rates (M^d=k (bar)PY)? what do you think would drive interest rates in this environment?

Reference no: EM13159239

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