Interest as Rent for Money

Watch this lecture, which explains that we can think of interest as a form of rent for money. Note that equilibrium interest rates are the balance or combination of the market for money plus the investment demand for money. Consequently, the equilibrium real GDP and the price level determine the equilibrium based on transactional demand and investment demand.

 

Source: Khan Academy, https://youtu.be/Lru0vKmkzR8
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Last modified: Wednesday, September 20, 2023, 3:50 PM