(Solved): The demand for money in a country is given by Md = 8000-8000i+Y Assume the output is initially 500 ...

1. The demand for money in a country is given by

Md = 8000-8000i+Y

Assume the output is initially 5000

1. Make a graph of money demand with proper labelling
2. Suppose the money supply is set at 8000. On the same graph show the money supply. Calculate and show the equilibrium rate.