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In a Graph Having the Price Level P on the Vertical

question 110

Essay

In a graph having the price level P on the vertical axis and the quantity of money M on the horizontal axis and considering V and Y independent on the price level or the quantity of money demanded, draw the Md - P curve that is implied by the quantity equation. Now, replace the price level in your graph with the value of money on the vertical axis and redraw the money demand curve. What do you observe?


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