Predict Changes in the Euro–Dollar Exchange Rate
Supply of Money in the Money Market
What Are Appreciation and Depreciation?

Establish Money Market Equilibrium

Step 1 of 3
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


Promoted Stories From Around The Web

blog comments powered by Disqus
Inflation Rates and Exchange Rates
What Is an Exchange Rate Regime?
Exchange Rate as the Price of Foreign Currency
How to Determine Exchange Rates through Supply and Demand
How to Work with the Purchasing Power Parity (PPP)