3.2.1 - Demand for Money
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Practice Questions
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What is demand for money?
💡 Hint: Think about what people use money for in their daily lives.
How does income affect demand for money?
💡 Hint: Consider what happens when your income increases.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What happens to the demand for money when income increases?
💡 Hint: Think about your own spending habits when you receive a pay raise.
True or False: Higher interest rates generally increase the demand for money.
💡 Hint: Consider the trade-off between saving and spending.
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Challenge Problems
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Imagine the economy is experiencing a downturn. Describe how this affects the demand for money and provide a rationale.
💡 Hint: Think about consumer behavior during financial uncertainty.
Evaluate how a sudden increase in interest rates by the central bank might influence consumer spending and the overall economy.
💡 Hint: Consider the immediate effect on loans and mortgages.
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