Page 151 - DECO201_MACRO_ECONOMICS_ENGLISH

Macro Economics

Notes 4. What is ‘demand for money’ curve? When does it shift?
5. Explain how an individual decides how much money to hold to carry out transactions.
6. Explain speculative motive for holding money.
7. Establish the relation between market rate of interest and market price of bond with the
help of an example.
8. Discuss the narrow and broader measures of money.
9. Discuss the factors that affect demand for money.

10. ‘According to speculative demand for money, when interest rates are low, investors wish
to hold bonds and therefore, the demand for money will be low.’ Do you agree with the
statement? Justify your answer.
Answers: Self Assessment

1. True 2. True
3. False 4. False
5. True 6. narrow
7. chequable deposits 8. Fixed deposits

9. near monies 10. Time deposits with banks
11. (d) 12. (b)
13. (c) 14. (c)

15. (a)
8.7 Further Readings

Books Dr. Atmanand, Managerial Economics, Excel Books, Delhi.
R. L. Varshney, K. L. Maheshwari, Managerial Economics, Sultan Chand & Sons,
New Delhi

S K Agarwala, Principles of Economics, 2 Edition, Excel Books
nd
Thomas F. Dernburg, Macro Economics, Mc Graw-Hill Book Co.

Online links http://tutor2u.net/economics/content/topics/monetarypolicy/
demand_for_money.htm
http://mises.org/daily/3733
http://internationalecon.com/Finance/Fch40/F40-4.php

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