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In this lecture we continue our look at money. In the last lecture, we focused on money supply. Now we turn our attention to the demand for money. After examining the demand for money, we put money supply and the demand for money together. The interaction of money demand and supply determines the level of interest rates in the economy. Upon completion of this lecture, you should understand and be able to answer these key questions: 1. How much money do people like to have? Is the answer "all they can get?" 2. Why do people like to have money in their wallets and in their checking accounts? 3. Are there times when people like to hold more money than at other times? 4. Sometimes interest rates are higher than at other times. What are some of the reasons for this?
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