Money Demand
Money demand refers to the amount of money that individuals and businesses desire to hold for transactional and speculative purposes. It represents the desired quantity of money that people are willing to keep as a store of value to meet their needs for purchasing goods and services. Money demand is influenced by several factors, including income, price levels, interest rates, and preferences for holding money.

Equation of Money Demand
The equation of money demand is typically represented as follows:
Md = P * L(Y, i)

Where:
- Md represents the demand for money
- P represents the price level
- Y represents real income or output
- i represents the nominal interest rate
- L represents the liquidity preference function

Example:
Let's consider an example where the price level is 100, real income is $10,000, and the nominal interest rate is 5%.

Md = 100 * L(10,000, 0.05)

Solving Questions:
To solve questions related to money demand, you need to consider the factors influencing money demand and the equation mentioned above. Here are some steps you can follow:

1. Identify the factors influencing money demand: Consider the variables that affect the demand for money, such as income, price levels, interest rates, and preferences for holding money.

2. Determine the specific values for the variables: Gather information about the specific values for income, price levels, and interest rates from the given question or scenario.

3. Substitute the values into the equation: Plug in the values of the variables into the equation of money demand to calculate the demand for money.

4. Calculate the demand for money: Use the equation to compute the demand for money based on the given values.

5. Interpret the results: Analyze the calculated money demand and interpret the implications of the findings. Consider how changes in the variables would impact the demand for money.

By following these steps, you can solve questions related to money demand and gain a better understanding of the factors influencing individuals' and businesses' desire to hold money for various purposes.