Ive read elsewhere this should just be g if all else


Suppose that the money demand function takes the form (M/P)^d = Y/5i. If output grows at rate g, at what rate will the demand for real balances grow assuming a constant nominal interest rate? I've read elsewhere this should just be g if all else remains constant, but it would seem to me the answer should be g/5. If g is 10, and all other values are equal, would the demand for real balances not be 10Y/5i=2y/i --- making demand for real balances grow by a factor of 2, or g/5?

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Macroeconomics: Ive read elsewhere this should just be g if all else
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