The purpose of this Tutorial Sheet is for you to understand how the money market works. It involves understanding (1) the determinants of demand for money and demand for treasury bills, (2) the relationship between the price of treasury bills and the interest rate, (3) how the balance is determined in this market and how it can be changed.

The purpose of this Tutorial Sheet is to study the relationship between inflation and unemployment. At first glance, these are two phenomena with no obvious link, this is indeed true in the long term but in the short term, it can be shown that there is an inverse relationship between inflation and unemployment.

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