Answer to Question #131178 in Macroeconomics for Gibela

Question

Question 5               (Marks: 10)

Explain in detail, with the aid of a graph, the two components of the demand for money. 

Identify the main determinant of each component. 

In your graph, illustrate each component as well as the total demand for money. 

(Hint: You do not have to draw separate graphs for each component. You can combine everything

on one set of axes).

(Note: 3 marks for the graph and 7 marks for the explanation)

Answer 1

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