Interest Rate Determination
Completion requirements
Here, you will learn about determining interest rates and how supply and demand play a role in determining interest rates. Pay attention to the Fed's role in this determination and to the effects of the increase of money supply on interest rates. What are the determinants of interest rates?
Money Functions and Equilibrium
Learning Objective
- Define real money demand and supply functions, graph them relative to the interest rate, and use them to define the equilibrium interest rate in an economy.