申論題

4. Consider an economy with a consumption function C =: C_o t c- Y_d, where Ya represents disposable income； an investment function I = I_o-b r , where r represents interest rate； tax revenue T = T_o +t Y, where t represents tax rate； transfer payment TP； a money demand function L=k・Y -h.r； a money supply function, M = M_o/P, where Mo is the nominal money supply controlled by the central bank, and P represents the general price level.

(B) (10 points) Discuss how Y* is related to nominal money supply, and how this relationship is affected by h.