Predict Changes in the Euro–Dollar Exchange Rate
The Role of Multinational Firms in Foreign Exchange Markets
Does IMF Support Provide Stability or Create Moral Hazard?

Establish Money Market Equilibrium

Step 1 of 3
Previous
Next Slideshow
Next Slideshow

The money market equilibrium, with the equilibrium real interest rate, r1, and the equilibrium quantity of real money, m1.

Remember the variables that can shift the money demand and supply curves. In the next example, a change in the country’s output and nominal money supply is applied to the money market. You can predict how the real interest rate and the real quantity of money in the money market change.

  • Add a Comment
  • Print
  • Share

Recommends

Promoted Stories From Around The Web

COMMENTS »
blog comments powered by Disqus
The Roles of Speculators and Central Banks in Foreign Exchange Markets
What Are Appreciation and Depreciation?
How to Work with the Purchasing Power Parity (PPP)
Empirical Evidence on the (Relative) Purchasing Power Parity (PPP)
Maintain the Internal Balance of the Metallic Standard