Equation of LM-curve in terms of the rate of interest (\( i \)) when money supply equals \(…
Money-market equilibrium requires \(\overline{M}=KY-hi\). Rearranging gives \(hi=KY-\overline{M}\), so \(i=(K/h)Y-\overline{M}/h\).
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Equation of LM-curve in terms of the rate of interest () when money supply equals and demand for money is will be :
Answer and explanation
Correct answer B
Money-market equilibrium requires . Rearranging gives , so .
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Madhya Pradesh SET (MP SET)