Why might the relationship between the demand for money and the rate of interest be an unstable one?
Answer to relevant QuestionsWhat effects will the following have on the equilibrium rate of interest? (You should consider which way the demand and/or supply curves of money shift.)(a) Banks find that they have a higher liquidity ratio than they ...Explain how financial crowding out can reduce the effectiveness of fiscal policy. What determines the magnitude of crowding out?Does it matter if a country has a large national debt as a proportion of its national income?Is there a compromise between purely discretionary policy and adhering to strict targets?For what reasons do countries experience very different long-run rates of economic growth from each other?
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