Economics notes Changes in demand: - Financial results - Changes in results Real money: bank deposits and other personal assets When prices rise, reality decreases, other things being equal. People give back their wealth to increase Savings and to reduce aggregate demand. Change Effect: - When the price increases, the interest rate also increases. - An increase in price lowers the value of the currency. - With a small amount of money, the bank can earn a high interest rate. Changes in aggregate demand: Main drivers of change: - Expectations - Monetary and fiscal policy - World economy Expectations: Changes in disposable income, changes in stock Financial expectations and changes in income Business transactions: Non-cash transactions involve the direct exchange of goods and services for other goods and services. Money Economy: Money Economy. Individuals do not directly exchange goods and services for other goods and services. Silver removes two different parts of the requested question. Advantages of Currency: ● Simple Clipping ● Portability ● High Liquidity - Currency is easy to use Disadvantages of currency:
Currency has a fixed number. When the price of goods and services rises, the value of money falls. The more stable the currency, the more important it is. Legal tender: The currency in Canada today is the single currency. Multiplier effect of injection on equilibrium: - Aggregate demand increases more when the economy is below potential GDP - Aggregate demand increases when the economy is above potential GDP When the money supply is greater: ● Person purchase contract 2 Money pull, increase demand - Contract price rises and interest rate falls When money is most needed: Person sells contract 2 for bonus, bonus balance leads to - Bond price falls and interest rate rises.