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to buy goods and services
Felton O'Hara
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What is the total demand for money?
According to John Maynard Keynes, the total demand for money is composed of transactional demand, precautionary demand and speculative demand for money.
What are the determinants of money demand in an economy?
discuss the determinant of money demand
What happens to money demand when there is an increase in interest rates?
money demand will decrease
What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
The interest rate falls if Answer a money demand shifts left or money supply shifts right b either money demand or money supply shifts left c money demand shifts right or money supply shi?
a
What is the total demand for money?
According to John Maynard Keynes, the total demand for money is composed of transactional demand, precautionary demand and speculative demand for money.
What are the determinants of money demand in an economy?
discuss the determinant of money demand
What happens to money demand when there is an increase in interest rates?
money demand will decrease
Will the money supply increase if people deposit their cash into a demand deposit account?
yes
What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
The interest rate falls if Answer a money demand shifts left or money supply shifts right b either money demand or money supply shifts left c money demand shifts right or money supply shi?
a
If consumers begin using credit cards for all of their purchases you would expect to see inc demand for money dec demand for money dec in quantity demanded of money?
decrease in the demand for money
Why is money demand downward sloping?
Money demand is always downward sloping because when the cost of holding money increases (e.g. interest rates rise) the quantity of money consumers hold decreases. This means at lower interest rates, people want to hold more money and fewer bonds.
What would happen to the quantity of money people wish to hold when there is a decrease in the price level?
It would decrease, if there are lower prices, than people would naturally demand less of it. This is the quantity theory of money Money Demand= Price level*Income/Velocity of Money, what is important here is that Price level is in the numerator, so when it decreases the total quantity of money decreases as well.
What is money in a checking account called?
Money in a checking account is called demand deposit.
Why do many people spend money on entertainment even in periods of economic hardship?
Fill their demand and desires
What factors that affects the demand for money?
The major factors that affect the demand for money are price level, interest rates, economy, and the price of money.
