Real money demand in the economy is given by L = 0.5Y – 2500…

Real money demand in the economy is given by L = 0.5Y – 2500i,where Y is real income and i is the nominal interest rate. In equilibrium, real money demand L equals real money supply M/P. Suppose that Y equals 1000 and the real interest rate is 0.02. At what rate of inflation is seignorage maximized?