Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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) Derive (again!) the LM curve from considering how income increases affect money
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Introduction
Money supply includes all money in the economy. Money supply may include demand deposits, time deposits, currency, and different types of liquid assets. Money demand is also essential to know the position of monetary equilibrium in the economy. Monetary equilibrium is the equilibrium between demand for money and supply for money.
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