Economy, asked by madsidd3077, 10 months ago

Why does greater real money supply increase real interest rate

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Answered by Anonymous
0

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A fall in interest rates increases the amount of money people wish to hold, while a rise in interest rates decreases that amount. A change in prices is another way to make the money supply equal the amount demanded. When people hold more nominal dollars than they want, they spend them faster, causing prices to rise.

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