Real Money Balances Macroeconomics

real money balances

The following text is used only for educational use and informative purpose following the fair use principles.

Keynes’ real balance equation, however, is not free from defects. In fact, Keynes himself had recognised certain defects in it, which he pointed out later, in his Treatise on Money, as discussed below: 1. In Keynes’ equation, P refers only to the price level of consumption standard value of money, in a narrow sense. The real demand for money is defined as the nominal amount of money demanded divided by the price level. For a given money supply the locus of income-interest rate pairs at which money demand equals money supply is known as the LM curve.

Term real-balance effect Definition: A change in aggregate expenditures on real production made by the household, business, government, and foreign sectors that results because a change in the price level alters the purchasing power of money. There is a cost associated with holding money balances (you give up interest payments), 2. There is no intrinsic value in the money balances you hold except in their use as a medium of exchange. Generally, you acquire money in order to get rid of it - to buy things.

Demand for real money balances

Real Money Balances Macroeconomics Book

We thank the authors of the texts that give us the opportunity to share their knowledge



real money balances: The quantity of money in real terms.

Source :,%20BANKING,%20&%20FINANCIAL%20MARKETS.doc



Author : not indicated on the source document of the above text

Real Money Balances Macroeconomics Worksheet

Glossary of money, banking and financial markets

Real Money Balances Macroeconomics Examples

Economics money banking and financial market glossary index of terms

Definition and meaning of real money balances

Alimentation - nutrition
Astrology, esoteric, parapsychology and fantasy
Biology and genetics
Botany and agriculture
Courses, training, guides, handbooks and tips
Culture General and actuality
Dermatology, health and wellness
Dictionaries and glossaries
Economics and finance
Education and pediatrics
Engineering and technology
English grammar and anthology
Fashion and show business
Food, recipes and drink
Games, play space
Geography, geology and environment
Informatics and computer world
Jobs world
Leisure and DIY do it yourself
Lessons for students
Literature, biographies and journalism
Mathematics, geometry and statistical
Notes and concept maps
Photography and images - pictures
Psychology and psychoanalysis
Quiz questions and answers
Rights law and political science
Sociology and cultural anthropology
Summaries and reviews
Television, film - movies and comics
Theater and communications
Theses, themes and dissertations
Travel and tourist guides
Useful documents and tables
Utility, calculators and converters
Weather and meteorology

This is the right place where find the answers to your questions like :

The Asset Demand For Money

Who ? What ? When ? Where ? Why ? Which ? How ? What does real money balances mean ? Which is the meaning of real money balances?

What does real money balances mean ?

Real Balance Effect

Alanpedia.comfrom 1998 year by year new sites and innovations

Real Money Balances Macroeconomics Definition

Main page - Disclaimer - Contact us