Predict Changes in the Euro–Dollar Exchange Rate
What Are Appreciation and Depreciation?
The Advantages and Disadvantages of Fixed Exchange Rates

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
What Are Effective Exchange Rates?
The Monetary Approach to Balance of Payment
What Determines (Or Changes) Exchange Rates
The Role of Multinational Firms in Foreign Exchange Markets
Advantages and Disadvantages of Floating Exchange Rates