Under fixed exchange rate, in general which one of the following statements is the MOST accurate?
A) The following condition should hold for domestic money market equilibrium: Ms/P = L(R , Y).
B) The following condition should hold for domestic money market equilibrium: Md/P = L(R , Y).
C) The following condition should hold for domestic money market equilibrium: Ms = L(R , Y).
D) The following condition should hold for domestic money market equilibrium: P = L(R , Y).
E) The following condition should hold for domestic money market equilibrium: R*Md/P = L(Y).
ANSWER
A
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