What is the money demand curve?

1 Answer
Safi
Dec 22, 2014

Money demand curve is a curve that shows the relationship between the quantity of money demanded and the interest rate .

http://www.hehs.d211.org/people/armstrongs/Courses/AP%20Macroeconomics/POWERPOINTS/Monetary%20Policy_files/frame.htm

Quantity of money demanded is negatively related with interest rate; the logic being that as interest rate increases, you tend to hold lesser quantity of money and instead deposit it in the bank to earn interest.

Related questions
Impact of this question
4533 views around the world
You can reuse this answer
Creative Commons License