Question 19.11

2. How will the following events affect the demand for money? In each case, specify whether there is a shift of the demand curve or a movement along the demand curve and its direction.

  1. There is a fall in the interest rate from 12% to 10%.

  2. Thanksgiving arrives and, with it, the beginning of the holiday shopping season.

  3. McDonald’s and other fast-food restaurants begin to accept credit cards.

  4. The Fed engages in an open-market purchase of U.S. Treasury bills.