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What is the basic determinant of (a) the transactions demand and (b) the asset demand for money? Explain how these two demands can be combined graphically to determine total money demand. How is the equilibrium interest rate in the money market determined? How might (a) the expanded use of credit cards, (b) a shortening of worker pay periods, and (c) an increase in nominal GDP each independently affect the transactions demand for money, and the equilibrium interest rate?
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