Eco120Int_Lecture8
... • The total demand for money is the sum of transactions and asset demand. • Transactions demand rises in P and Y. As i rises, people will try to minimize the use of cash in purchases, so transactions demand does not rise in i, and perhaps even falls in i. (We will assume it does not depend on i for ...
... • The total demand for money is the sum of transactions and asset demand. • Transactions demand rises in P and Y. As i rises, people will try to minimize the use of cash in purchases, so transactions demand does not rise in i, and perhaps even falls in i. (We will assume it does not depend on i for ...
IMA612S-2015-Unit four (4) final
... supplied, individuals try to obtain money by selling bonds or making bank withdrawals. To attract now-scarcer funds, banks and bond issuers respond by increasing the interest rates they offer. the interest rate reaches the equilibrium level, at which people are content with their portfolios of monet ...
... supplied, individuals try to obtain money by selling bonds or making bank withdrawals. To attract now-scarcer funds, banks and bond issuers respond by increasing the interest rates they offer. the interest rate reaches the equilibrium level, at which people are content with their portfolios of monet ...