Determining of Interest Rate, II - The supply and the demand for central bank money - The demand for money
3 important questions on Determining of Interest Rate, II - The supply and the demand for central bank money - The demand for money
When will people hold more money?
peoplewillhold more money thehigherthe level of transactions andthelowerthe interest rate on bonds.
In what 2 things do people hold their money?
Assumption: people hold a fixedproportion of their money in currency(c) and by implication hold a fixedproportionin deposit accounts (1-c).
What what leads a demand for deposit accounts?
Demand for deposit accounts leads to a demand by banks for reserves! (which is the second component of the demand for central bank money).
Try our study magic for free
a PDF, study it super fast
- No sign up, email or credit card needed!
- AI makes unlimited flashcards
- Get unlimited quizzes and tests
- Ask AI anything
Create a notebook
- No sign up, email or credit card needed!
- Have and keep perfect overview
- Make flashcards, notes and mind maps
- Review, test and score!
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
