Explain the impact of the asset demand, transaction demand, & total demand for money on the economy.

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asked Feb 27, 2021 133k views

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RobF · Answer 1 · 2021-03-03T16:53:05+0000

Asset demand varies inversely with the interest rate, since that is the price of holding idle money. Total demand for money will equal quantities of money demanded for assets plus that for transactions. At any interest rate below the equilibrium rate, there is an excess demand of money.

Explain the impact of the asset demand, transaction demand, & total demand for money on the economy.

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