Why is there a positive correlation between the demand for money in the money market and the level o

1.On the face of it, whether it is an increase in personal or national income, individuals have more money and less demand for money. This is the traditional monetary theory, which is applicable to the small-scale commodity economy and is not adapted to the development of modern society.

2.At a deeper level, at the national level, an increase in national income represents an increase in economic vitality. At the enterprise level, the willingness of enterprises to invest has increased, the demand for money has increased, and a large amount of money has flowed into enterprises from banks and other financial institutions.

At the individual level, an increase in personal income will increase consumer demand, and according to the theory of diminishing marginal consumption, only more expensive things can achieve their consumption utility. For example, if someone with a car wants to change to a BMW, and a person with a BMW wants to change to a 7 Series, once their income increases, they will definitely borrow money to buy luxury cars, luxury goods, etc., and some spend more on beauty and health, only buy expensive ones, not the right ones, so the demand for money increases. Therefore, if you have money, you need more money to maintain the previous consumption utility.

This is a liquidity problem, don't we often hear scholars talk about excess liquidity, in fact, this is the problem.

If the demand for money increases, it means that the demand for money for economic development increases, and the liquidity of money will only increase when the economic situation is good.

When the liquidity increases, any kind of market related to the first will increase in price, so that our income will increase, for example, the enterprise product ****, the enterprise income will increase, proportional.

When the wage is **, the income of the worker increases, which is directly proportional.

The seller's sales are good, even if they sell side dishes, their income has also increased, which is directly proportional.

An increase in consumption will also lead to production, and liquidity will increase.

However, an increase in income does not represent purchasing power.

If it increases, income increases, in fact, prices also increase, and the state has to withdraw liquidity to control the growth of CPI.

。。Top. I don't seem to understand it.

Not bad, it's just that the rate of growth is inconsistent.

1. As the national income increases, the purchasing power of the state and individuals will increase accordingly, and the corresponding products will be more. If the money supply does not increase, it will cause deflation.

3. The increase in national income, from the perspective of the overall macroeconomy, the total output also increases, which indicates that the market for production factors needs more money for the exchange of equipment, raw materials and other commodities, which means that the demand for money increases.

The increase in income leads to a shift in the money demand curve to the right, and the demand for money increases. At the same time, because of the money supply.

And ** water number mountain level unchanged, money supply curve.

Not moving, because the money demand curve shifts to the right, and interest rates will rise. Since the increase in the level of income increases the demand for money for a given money supply, the money market must be restored only if the speculative demand for money falls through the rise in interest rates.

, so the money demand curve is of positive slope. The actual demand for money l is determined by ky-hr, and when income y increases, the actual demand for money l will of course increase. The real money supply m is the ratio of the money supply to the ** level, both of which remain unchanged, that is, the real money supply remains unchanged.

When income y increases and the demand for money increases, only a rise in interest rates can reduce the demand for money so that it is equal to the constant real supply of money.

Extended Information:1Factors influencing the demand for money:

There are three most important factors that influence people to hold their assets in monetary terms, namely income, ** and interest rates. The most important factor influencing the demand for money for both transactional and preventive motives is income. There is a same-direction relationship between income and money demand, that is, the higher the income level, the higher the level of money demand.

If the amount of money people hold is the k share of income, then this part of the money demand can be expressed as l t lt(y) ky,k 0, and the parameter k expresses the sensitivity of money demand to income changes, and the greater k is, the greater the impact of income changes on money demand.

2.Market interest rates.

It refers to the interest rate determined by the supply and demand in the capital market, the capital is tight, the supply is less than the demand, and the interest rate rises; Funds are loose, supply is in demand, and interest rates are falling. In turn, interest rates can affect the supply and demand of funds, and promote the balance between supply and demand of funds. At the same time, due to the reduction of interest rates, funds are raised from the market for the construction of new enterprises or the expansion of the production or operation scale of existing enterprises, the interest burden has been reduced, and the number of fund-raisers has increased, and the demand for funds has increased.

This may lead to a gradual equilibrium in the supply and demand of funds in the market. Conversely, if the demand for funds in the market exceeds the supply, the interest rate is tight, and the interest rate is **, it will cause a series of opposite economic activities.

That is, people squeeze out some funds from all sides to invest in the market in order to obtain more interest income; At the same time, due to the increase in the cost of raising funds, the profits that may be obtained from the use of such funds will be reduced, and as little as possible will be raised from the market, so that the tight situation of short supply of funds will be eased.

The aggregate supply of the market determines the demand for money. The exact amount of money needed in the economic system depends fundamentally on how much actual resources are needed for money to realize its circulation and complete the reproduction process of production, exchange, distribution, and consumption.

Whether it is the monetary demand of the enterprise or the monetary demand of individuals, it is generally constrained by the total supply of the market. The aggregate supply of the market determines income, and income is the most decisive variable of the money demand function.

The balance between supply and demand of commodities in the market is regarded as an important proportional relationship with the national economy.

The practice since the founding of the People's Republic of China has proved that the work of comprehensive balance of the national economy has been done in a wild way, and if the various proportional relations are properly arranged, the supply and demand of commodities will be relatively balanced, the market will be richer than the hinge, and the people's living standards will be steadily improved.

On the contrary, in which period the comprehensive balance of the national economy is relaxed, the major proportional relationship of the national economy is out of balance, the commodity balance will be out of balance, the market commodity will be tight, and the people's livelihood will be seriously affected, and the key to doing a good job in the comprehensive balance of the national economy is to do a good job in the balance of fiscal revenues and expenditures, the balance of credit revenues and expenditures, and the balance of supply and demand of materials.

The increase in income, BAI leads to a shift in the money demand curve to the right, and money demand.

Ask for an increase. When zhi is the same as DAO, because the inner and ** levels of money supply remain unchanged, the supply curve of goods and currencies will not move, because the money demand curve will shift to the right, and interest rates will also rise.

Since the rise in the income level increases the demand for money under a given money supply, the equilibrium in the money market must be restored through the rise in interest rates, which causes a decrease in the speculative demand for money, so the money demand curve is a positive slope.

Note that the question is "when income increases", not "income".

The increase in income reaches equilibrium", and when the income of du just increases, the monetary demand can be derived from the number of functions.

DAO demand is increasing, so supply and demand are unbalanced at this time, and since the supply and ** remain unchanged, a new equilibrium can only be achieved by raising interest rates. In addition, the equilibrium state should be higher than before, and the demand for money will remain unchanged.

To put it simply, equilibrium is that the money supply is equal to the demand for money, that is, m=l, I believe you can see from the version l=ky-hr that with the increase of income, the demand for money increases, at this time, in order to achieve market equilibrium, that is, in order to achieve m=l, because m is unchanged, l must decrease, in order to make l decrease, r must increase.

In this way, the interest rate is increased in order to equilibrium the money market, since the premise is that the money supply is assumed to be constant.

Adopt it, thank you.

1.by l=ky-hr

It can be known that if k, h, and r do not change, the rising source of y will cause l to become larger, and bai is income.

The increase in the DU led to an increase in the demand for money.

2.Peer deformation: r=(ky-l) h

It is concluded that if the other parameters of the DAO are constant, r rises with the increase of y.

3.In fact, for the above function, there is not a single variable, but the increase in income is the dependent variable, and the direct effect is more pronounced than the interaction between l and r.

Answer]: B Money supply and money demand are closely related to the search for false demand, from the degree of relationship between the two, the demand for coin determines the money supply. Monetary demand includes the demand for money for objective economic development and the demand for money for economic agents.

Answer]: A When there is a significant increase in income level, the consumption level will increase, and the savings and cash in hand will also increase accordingly. As the level of income increases, the demand for hail money increases, so that the change in income moves in the same direction as the change in the amount of money demand.