Predict Changes in the Euro–Dollar Exchange Rate
Does IMF Support Provide Stability or Create Moral Hazard?
What Is an Exchange Rate Regime?

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


Promoted Stories From Around The Web

blog comments powered by Disqus
Apply Relative Price to Exchange Rates
Does the Type of Money Matter for the Exchange Rate?
What Are Effective Exchange Rates?
How to Figure the Absolute and Relative Purchasing Power Parity (PPP)
Maintain the Internal Balance of the Metallic Standard