Chapter 17.

Chapter 17. - Chapter 17 Money Supply and Money Demand A...

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Chapter 17. Money Supply and Money Demand. A. Price level does not affect currency or deposits. o There is a fixed number of these out there. The MS is independent of what prices are. Money demand = How much cash you want to put in your wallet, hold in your checking account. o MD at 0 is 0. All else held constant, there is stuff that changes the money supply. What Affects Money Demand: o 1. ATMS, Credit Cards, Debit Cards: Caused MD to decrease, because its more easy to access. Think of the quantity of money as how much is in your wallet. Now, with ATMS, you don’t have to carry around as much. o ***C. . o Nothing happened to the quantity of money didn’t change. The demand for money changes. Prices increase. Overall, people are probably better off because of this. They are paying higher prices, but there are still the same amounts of goods and services. They’re not worse off.
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This note was uploaded on 04/24/2009 for the course ECON 2105h taught by Professor Staff during the Spring '08 term at UGA.

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Chapter 17. - Chapter 17 Money Supply and Money Demand A...

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