money market graph why do we have it? what makes the demand curve move?
DESCRIPTION
The Opportunity Cost of Holding Money The opportunity cost of holding money Changes with the overall level of interest rates Short term interest rates Long-term interest ratesTRANSCRIPT
![Page 1: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/1.jpg)
Money Market GraphWhy do we have it? What makes the demand curve move?
![Page 2: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/2.jpg)
What is this about?• What is the money demand curve?
• Why does the liquidity preference model determine the interest rate in the short run?
![Page 3: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/3.jpg)
The Opportunity Cost of Holding Money• The opportunity cost of holding money
• Changes with the overall level of interest rates
• Short term interest rates
• Long-term interest rates
![Page 4: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/4.jpg)
The Money Demand Curve• Money Demand
• The reason for money demand’s downward slope
![Page 5: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/5.jpg)
Shifts of the Money Demand Curve• Price Level
• Real GDP
• Technology
• Institutions
![Page 6: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/6.jpg)
The Equilibrium Interest Rate• Liquidity Preference Model of
the Interest Rate
• Money Supply
![Page 7: Money Market Graph Why do we have it? What makes the demand curve move?](https://reader036.vdocuments.us/reader036/viewer/2022090107/5a4d1c037f8b9ab0599f07f9/html5/thumbnails/7.jpg)
Two Models of the Interest Rate