Under fixed exchange rate, in general which one of the following statements is the MOST accurate?
A) The following condition should hold for domestic money market equilibrium: Ms/P = L(R , Y).
B) The following condition should hold for domestic money market equilibrium: Md/P = L(R , Y).
C) The following condition should hold for domestic money market equilibrium: Ms = L(R , Y).
D) The following condition should hold for domestic money market equilibrium: P = L(R , Y).
E) The following condition should hold for domestic money market equilibrium: R*Md/P = L(Y).
A
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The best example of fiscal policy is ___.
A. the Fed lowering interest rates B. the government raising taxes
Suppose that the typical consumer buys one apple and one orange every month. In the base year 1986, the price for each was $1. In 1996, the price of apples rises to $2, and the price of oranges remains at $1. Assuming that the CPI for 1986 is equal to 1, the CPI for 1996 would be equal to:
A. 1/2. B. 1. C. 3/2. D. 2.