Money, Interest Rates, And Exchange Rates - The Demand for Money by Individuals

3 important questions on Money, Interest Rates, And Exchange Rates - The Demand for Money by Individuals

What says the interest about wealth?

The higher the interest rate, the more you sacrifice by holding wealth in the form of money.

Changes in risk influence money demand,

Changes in the risk of holding money need not cause individuals to reduce their demand for money and increase their demand for interest-paying assets. So it won't change anything!

Needs for liquidity changes demand for money. In what way?

A rise in the average value of transactions carries out by a household or firm causes its demand for money to rise.

The question on the page originate from the summary of the following study material:

  • A unique study and practice tool
  • Never study anything twice again
  • Get the grades you hope for
  • 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
Trustpilot Logo