ALL Demand for Money (DM) FRQ
Demand for Money Cheat Sheet here.
2017 AP Macroeconomics Exam
If consumers wish to hold less money because the fees on credit cards have been lowered
the DM curve will shift to the left
the NIR will decrease.
2010 AP Macroeconomics Exam
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If consumers wish to hold less money because the fees on credit cards have been lowered
the DM curve will shift to the left
the NIR will decrease.
|
2007 AP Macroeconomics Exam
2007B AP Macroeconomics Exam
(B.) Use a Money Market graph to explain what happens to New Zealand's
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| If people are worried about the state of the world, the stock market, they will tend to take money out of anything risky (stock market) and hold the cash for mainly two reasons 1) to keep the value of their holdings from decreasing 2) If things are bad people naturally want to hold cash for emergencies |
2007B AP Macroeconomics Exam
(A.) Australia begins to recover from their recession, what happens to New Zealand's AD/AS.
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| If Australia begins to recover they will buy more exports from New Zealand exports increasing increases New Zealand's AD curve |
(i) Demand for Money. Explain.
(ii) NIR
As New Zealand's AD increases the PL also increases
PL increasing drives up people's demand for Money (DM)
which drives up the NIR
(C.) The PL in New Zealand increases what happens to the Real interest rate.
As the PL increases the Real Interest Rate falls
but
an increasing NIR implies that the RIR is also increasing
RIR is indeterminate
