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International Economics (Subject) / Money, Interest Rates, and Exchange Rates (Lesson)

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• By which factors in the demand of money determined?(3) Interest rate Price Level Real national income
• What does an increase of the money supply do the interest rate and the price level+output? lowers interest rate, price level and output
• What does an increase of output do to the interest rate, price level and output? it raises the interest rate, the price level and the outout
• characteristics Price level (3): short run prices are sticky, long run flexible increase in the money supply, will raise prices in the long run rising exchange rate changes exchange rate expectations
• How does a raise of the money supply influence the exchange rate? an increase in the money supply will rise exchange rate in the short run

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