Supply and demand of money

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LuisCorrea
Posts: 4
Joined: Sat Jan 14, 2017 11:52 am

Supply and demand of money

Post by LuisCorrea »

Hello, I would like to know how the supply and demand of money influence the game.
To know what advantages and care must be taken
sietse
Posts: 7
Joined: Sun Mar 26, 2017 8:15 am

Re: Supply and demand of money

Post by sietse »

just some of my own views on this..

i think that supply and demand of money is of importance to the price of money (the interest rate)
the central bank uses this indicator to raise rates when there is more demand then supply.
and lower the interest rate to increase demand or stimulate borrowing.
the central bank will act in a dovish way to stimulate more inflation or hawkish meaning they dont like inflation.
also when the supply and demand is imbalanced for a long time and the central bank does not adjust accordingly..the economic state might turn to recession or crisis next.
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