Microeconomics



Microeconomics

Question : 1

The Demand for money is defined as a desire of holding wealth, which a person wishes to hold in the form of cash or bank deposit. The demand curve for money slopes downwards, for the reason that the risk of holding the money could increase, such as the increase in the interest rate or the change in the inflation rate, thus for this reason people might hold less wealth. In case of risk with financial assets, people will pull the money from market and hold the cash, resulting in increase in demand for money (McEachern, 2012).

Question : 2 ...