What is the money demand curve?

1 Answer
Safi
Dec 22, 2014

Money demand curve is a curve that shows the relationship between the quantity of money demanded and the interest rate .

http://www.hehs.d211.org/people/armstrongs/Courses/AP%20Macroeconomics/POWERPOINTS/Monetary%20Policy_files/frame.htm

Quantity of money demanded is negatively related with interest rate; the logic being that as interest rate increases, you tend to hold lesser quantity of money and instead deposit it in the bank to earn interest.

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