Predict Changes in the Euro–Dollar Exchange Rate
How to Work with the Purchasing Power Parity (PPP)
Exchange Rates in a Commodity Standard System

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
Exchange Rate as the Price of Foreign Currency
How to Determine Exchange Rates through Supply and Demand
Asset Approach to Exchange Rate Determination
Unilaterally Pegged Exchange Rates
Apply Relative Price to Exchange Rates