The money demand curve describes how the quantity of money demanded varies with
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The money demand curve describes how the quantity of money demanded varies with interest rate.
It is also important for you to note this information as a student.
It is normally said that the money market is rather an economic model whose role is to describe the supply and demand for money in a nation.
It is therefore very important in a given nation since the demand curve for money illustrates the quantity of money demanded at a given interest rate.
The demand curve for money signifies the quantity of money needed at a specific interest rate.
It is to be noted that the demand curve for money is sloping downward, means that people have an attitude to hold less of their wealth in the form of money when the interest rate can be earned at higher amount investing on bonds and other alternative sectors of investment.
The central bank controls the cash flow, and they keep interaction with other financial institutions.
This interaction is a big part of the financial market, and we can be illustrated well it using a supply curve.