When money demand function = 0.5 Y - 50r money supply function = 1000 Crore, Find LM curve equation.
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JNU SSS 2021 Question 9: IS-LM model
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When money demand function M_d = 0.5 Y - 50r money supply function Mₛ = 1000 Crore, Find LM curve equation. (A) Y = 2000 + 100r (B) Y = 3000 + 100r (C) Y = 4000 + 100r (D) Y = 26000 + 100r
Also written as: When money demand function M_d = 0.5 Y - 50r money supply function M_s = 1000 Crore, Find LM curve equation.
IS-LM model has come up 137 times in 7 exams since 2004.
What this question tests
This question is on Deriving the LM curve and its slope, part of IS-LM model in Macroeconomics.
How money market equilibrium gives an upward-sloping relation between interest rate and income.
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