Demand, Supply, and Equilibrium
Completion requirements
Here you will understand the relationship between money markets and interest rates. You will also come to learn how real GDP has an effect on the demand for money. What effect does interest rate have on the demand for money?
Try It!
What happens to the equilibrium price and the equilibrium quantity of DVD rentals if the price of movie theater tickets increases and wages paid to DVD rental store clerks increase, all other things unchanged? Be sure to show all possible scenarios, as was done in Figure 3.11 "Simultaneous Decreases in Demand and Supply". Again, you do not need actual numbers to arrive at an answer. Just focus on the general position of the curve(s) before and after events occurred.