Suppose the real money demand function is Md/P = 2400 + 0.2Y - 10,000 (r + ?e).Assume M = 5000, P = 2.0, and ?e = .03. If Y were to increase from 4000 to 5000, then the real interest rate would increase by how many percentage points?
A. 2
B. 4
C. 7
D. 5
Answer: A
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