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1 vote

What does L mean in the money demand equation?

Does L mean liquidity? Or does it simply mean that the LHS depends on i and Y? $L$ means simply that the money demand depends on $i$ and $Y$. You could have written $f(i, Y)$ or $\gamma (i, Y)$ or ...
1 vote

Why are full reserve banks called such, when they still have depositors?

Full reserve is just a bank holds that 100% of a demand deposit as a reserve. Full reserve banks are still banks since by definition: bank, an institution that deals in money and its substitutes and ...
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Is it true that lenders only set nominal!!! interest rates in contracts?

I think you mean "nominal" interest rates? Lender lend money with a certain interest rate. E.g. 10%. That means you borrow \$100 and you pay back \$110 next year. This is a nominal interest ...

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