Chapter 13 The demand for money -<Tab/>Money is demanded for means of exchange and a store of purchasing power Transactions demand -<Tab/>Transactions demand is the demand for money that is related to its use as a means of exchange Asset Demand -<Tab/>The demand for money that is related to its use as a store of purchasing power Main …showed first 75 words of 375 total…

…showed last 75 words of 375 total…supply of money interact in the market to bring about a state of equilibrium -<Tab/>When the interest rate is about its equilibrium level there is a surplus of money -<Tab/>As people try to rid themselves of money and buy assets that will provide high earnings, the demand for these assets rises, pushing up their price and causing the nominal interest rate to fall.