MONEY MARKET EQUILIBRIUM

DEMAND FOR MONEY Money market equilibrium is determined by demand and supply of money. The function form of demand for money is- m^d=F( P, Y, i) where m^d stands for money demand, P stands for price level, and i stands for rate of interest. (m/P)^d = F ( Y , i ) Demand for money …

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BASIC INDIFFERENCE CURVE ( ECONOMIC GOODS)

INDIFFRENCE CURVE An indifference curve represents different combinations of two goods that provide same level of satisfaction or utility. Furthermore, it means along the indifference curve utility remains constant. Assumptions All the commodities we consider are economic goods. Transitivity – if the consumer is indifferent between X and Y and consumer is indifferent between Y …

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