Money: Demand for and supply of money
Economics SSS 2 Third Term
WEEK 9
Money: Demand for and supply of money
Performance Objectives
Student should be able to:
- Identify various reasons for holding money.
- Identify the determinants of the money supply.
- Explain how changes in the price level affect the purchasing power of money.
Content
Demand for money
The demand for money is the total amount of money which all individuals in the economy wish for various reasons to hold. Alternatively, the demands for money refers to the desire to hold money i.e. keep ones resources in liquid form rather than spending it.
Reasons or motives for holding money
There are three motives for the demand for money or to hold money. These are:
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