The aggregate demand for money can be expressed by A) Md = P ...

[HCHenry]

The aggregate demand for money can be expressed by
 
  A) Md = P  L(R,Y).
  B) Md = L  P(R,Y).
  C) Md = P  Y(R, L).
  D) Md = R  L(P,Y).
  E) Md = R  L(R, P).

Question 2

Briefly describe two systems for fixing the exchange rates of all currencies against each other and the time periods in which they were used.
 
  What will be an ideal response?

[dantucker]

Answer to Question 1

A

Answer to Question 2

The first is to single cut one country's currency as the reserve currency. The other countries hold this reserve currency and fix their interest rate to it by standing ready to exchange domestic currency for the reserve currency. The U.S. dollar was the reserve currency from 1945 to 1973. The second is the gold standard in which central banks peg the prices of their currencies in terms of gold and hold gold as official international reserves. This was used between 1870 and 1914.