Question: How will the following two events affect the demand for money? In both cases, specify whether there is a shift of the demand curve or

How will the following two events affect the demand for money? In both cases, specify whether there is a shift of the demand curve or a movement along the demand curve, its direction, and briefly explain why.

a. The economy experiences a deflationary period (a fall in overall price levels).(4 points)

b. An increase in money resulting in a fall in nominal interest rates.

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