Money demand

Key Questions

  • What is the money demand curve?

    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/http://frame.htm](https://useruploads.socratic.org/L6Vgo5QToMf4vFxllzBA_slide0005_image004.gif)

    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.

    Safi · · Dec 22 2014

Questions

Money, Banking, and Financial Markets