The demand for money in a country is given by 𝑀𝑑=10,000−10,000𝑖+𝑌
Where 𝑀𝑑 is money demand in dollars, 𝑖 is the interest rate (a 10 percent interest rate means
10100=0.1), and 𝑌is national income. Assume 𝑌=$5000 initially.
Suppose the central bank wishes to keep the interest rate at the initial rate when the national income was $5000. By how much should it increase the supply of money, given the new national income of $7,500 and $10,000. Draw the long run endogenous money supply function.