Determine aggregate money demand
Problem: Describe the three main factors that determine aggregate money demand. Illustrate, with examples, how changes in these factors alter aggregate money demand.
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If I started with one equilibrium p* and went to another p* that had a higher price for X1, could the second p* be an equilibrium (using a Slutsky decomposition and keeping in mind the inferiority information supplied)?
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Describe the three main factors that determine aggregate money demand. Illustrate, with examples, how changes in these factors alter aggregate money demand.
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Task: Use demand and supply analysis with this statement: The economy is doing well in 2000. Income was rising and the stock market hit new record highs. As a result, the price of housing rose.
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