Predict Changes in the Euro–Dollar Exchange Rate
Supply of Money in the Money Market
How to Figure the Absolute and Relative Purchasing Power Parity (PPP)

Establish Money Market Equilibrium

Start with an increase in output.

An increase in output increases the money demand curve, which, in turn, increases the real interest rate without changing the quantity of real money.

  • Add a Comment
  • Print
  • Share

Recommends

Promoted Stories From Around The Web

COMMENTS »
blog comments powered by Disqus
Inflation Rates and Exchange Rates
How to Work with the Purchasing Power Parity (PPP)
Unilaterally Pegged Exchange Rates
Intervention into Floating Exchange Rates
Empirical Evidence on the (Relative) Purchasing Power Parity (PPP)