The aggregate money demand depends on

Question

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The aggregate money demand depends on all three factors: the interest rate, the price level, and real national income. As interest rates rise, the opportunity cost of holding money increases, so people demand less money. As the price level rises, people need more money to carry out transactions and make purchases, so the demand for money increases. Finally, as real national income rises, people have more income to spend, and they need more money to carry out those transactions, so the demand for money also increases.

The Aggregate Money Demand Depends on