Determine i ) whether each of the following would lead to increase /decrease or no change in the quantitly of money which people wish to hold.
Also ii) determine whether there is a shift in the money demanded curve or a movement along the demanded curve.
a) an increase in price level
b) an increase in real output
c) improvement in money's ability
d) an increase in market interest rate
if anyone know how to answer , can your provide a brief explanation for
the answer
thz a lot for answering!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
econ-demand for money 問題
2008-03-09 5:22 am
回答 (3)
2008-03-12 6:31 am
✔ 最佳答案
Real Money supply= Ms / P where Ms=money supply
p= price level
Money demand= Md(Y , R)
where Y is the real income of residence
R is the nominal interest rate
a) increase in price level, P. So the real money supply decrease , money supply curve shifts to the left. Norminal interest rate will increase and equilibrium quantity of money will decrease. Money demand curve will not shift, it just move along.
b) increase in real output= increase in real income= increase in Y
So money demand curve shifts to the right and norminal interest rate decrease
Equilibrium quantity of money increases
Money supply will not shift but only money demand.
c) i am not sure what's mean by "money's ability" but i intrepret it as the velocity of money, that means its ability to flow through the economy. it is possible that it stands for its purchasing power, i don't know. You better clearify.
d) Increase in market interest rate= increase in nominal interest rate= increase in R
The effect is ambiguous. Becasue either a decrease in money supply or an increase in money demand can cause R to increase. So there will be no shifting for money demand if it was the first case and there will be a shift if it was the second case.
2008-09-18 5:26 am
2008-03-10 8:17 pm
我答我識果 d la...
d. r 係內生因素，move along the curve-量下降，curve 當然不變
b. 有關 y [外生]既上升都會使到 md 升，money demand升，curve →
c. 我諗係同 liquidity preference 一樣，會使到 d 人揀楂多d 錢係手
如果係咁既話money demand升，curve →
岩岩諗到
a. demand for money 呢科係LM當中一part，ISLM assame 左 price level 係 fixed
呢個唔係好 sure ，不過應該岩
因為 md = ma*+ky-er ........
ps.要搞清楚咩係郁量，咩係郁成條 cuvre...
歡迎 msn 交流下
d. r 係內生因素，move along the curve-量下降，curve 當然不變
b. 有關 y [外生]既上升都會使到 md 升，money demand升，curve →
c. 我諗係同 liquidity preference 一樣，會使到 d 人揀楂多d 錢係手
如果係咁既話money demand升，curve →
岩岩諗到
a. demand for money 呢科係LM當中一part，ISLM assame 左 price level 係 fixed
呢個唔係好 sure ，不過應該岩
因為 md = ma*+ky-er ........
ps.要搞清楚咩係郁量，咩係郁成條 cuvre...
歡迎 msn 交流下
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