Page 161 - DECO201_MACRO_ECONOMICS_ENGLISH
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Macro Economics
Notes money and thus at H in (a) there is an excess demand for money. By similar argument, we
1
1
can start at F and move to G , at which level of income is lower. This creates an excess
supply of money.
Figure 9.7
Self Assessment
Fill in the blanks:
9. The supply of money in India is determined by the ...................................
10. The speculative demand for money is assumed to be an inverse function of the
.............................
11. LM-curve has a .............................. slope.
12. An increase in the quantity of money in circulation shifts the supply curve of money to the
.................................
13. ................................... in the money stock shifts the LM-curve to the right.
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