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Write down the equation of speculative demand for money. Prove that when r = rmax the speculative demand for money is zero. |
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Answer» \(M^d_s = \cfrac{r_{max}-r}{r - r_{min}}\) When r = rmax the equation becomes = \(\cfrac{r_{max}-r_{max}}{r_{max}-r_{min}}\) = \(\cfrac{0}{r_{max}-r_{min}}\)= 0 |
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