People live on two islands and they are equally distributed
regardless of their island of birth....
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Economics
People live on two islands and they are equally distributed
regardless of their island of birth. The total population on both
islands is 700. There is an initial stock of fiat money of $600.
There are equal probabilities that a person is on either island.
Assume that labor supply does not depend on price observed:l(pti) =
3 Answer the following questions: What is the money market clearing
condition for each island? VtMt = N (y - C1 - k) What is the
equilibrium price on each island in period 1?
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