Question

# demand for real money.

Liquidity function given (M^d/P) = L(i, Y ) = 0.5 * i^−2 * Y

If nominal

interest rate goes up from 10%-15%, what is the percentage change?

i think the formula is : change in (M/P) /(M/P) * i / change in i

how do i find M/P?

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