Demand for money and gdp, Macroeconomics

Assignment Help:

Q. Demand for money and GDP?

The demand for money also relies on the GDP as GDP is closely associated to national income. If you choose to hold a fixed proportion of your wealth as money, you would want to hold more money when Y increases (you will want to hold more bonds as well). In IS-LM model we presume that demand for money is positive function of GDP. 

As demand for money relies on Y and R in the IS-LM model, we write MD(Y, R) for demand for money. Remember that it relies positively on Y but negatively on R.


Related Discussions:- Demand for money and gdp

Last deposit if your saving account, You make a monthly deposit of $1,000 i...

You make a monthly deposit of $1,000 into a saving account for the next 10 years. How much can you withdraw immediately after your last deposit if your saving account pays 6% per y

Pine village needs some additional recreation fields, Pine Village needs so...

Pine Village needs some additional recreation fields. Construction will cost $225,000 and annual O&M expenses are $85,000. The city council estimates that the value of added youth

MONETARY POLICY, What are the instruments of monetary policies

What are the instruments of monetary policies

How large is the money supply, Assume that the following data describe the ...

Assume that the following data describe the condition of the banking system: Total Reserves                         $200 billion Transactions Deposited          $700 billion

What are the costs of economic growth, What are the costs of economic growt...

What are the costs of economic growth? Economic growth can result also into: • Increases within pollution noise and congestion • Unnecessary depletion of non-renewable r

Macroeconomics, Suppose that several months of data showed the CPI increasi...

Suppose that several months of data showed the CPI increasing at a 4.5% annual rate due largely to increases in the price of energy and food related commodities following several y

Newton''s donuts has been estimated, The demand function for Newton's Donut...

The demand function for Newton's Donuts has been estimated as follows: Qx = -14 - 54Px + 45Py + 0.62Ax where Qx represents thousands of donuts; Px is the price per donut; Py

INFLATION-UNEEMPLOYMENT TRADE-OFF UNDER ADAPTIVE EEX, Explain how inflation...

Explain how inflation unemployment trade-off is not feasible under adaptive expectation.MEC002

Granger causality, With the aim of this project to observe the impact of oi...

With the aim of this project to observe the impact of oil price shocks on macroeconomic indicators, testing for causality between these variables will establish whether or not, oil

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd