Make 2015 totally awesome. Take the Dummies challenge and you could win $1,000! Learn how.
Predict Changes in the Euro–Dollar Exchange Rate
What Determines (Or Changes) Exchange Rates
Exchange Rate as the Price of Domestic Currency

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
Combine the Money Market with the Foreign Exchange Market
Does the Type of Money Matter for the Exchange Rate?
The Advantages and Disadvantages of Fixed Exchange Rates
What Is an Exchange Rate Regime?
How to Work with the Purchasing Power Parity (PPP)