Sppose that the money demand function of country y is mpd , Business Economics

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Sppose that the money demand function of country y is mpd

Suppose that the money demand function of country Y is (M/P)d = L(i, Y ) = L(r + Eπ, Y ). (a) Write down the equilibrium conditions of real money balances (b) What will happen to the inflation rate, if money supply goes up? (c) What will happen to the inflation rate, if expected inflation for the future goes down?

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