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Why is equilibrium in the asset market described by the condition that real money supply = real money demand?

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Why is equilibrium in the asset market described by the condition that real money supply = real money demand?

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  1. there are two aspects of your question

    one why we call it asset market when its money supply equal money demand

    the answer is that we take a broad measure of money that takes into account a lot of assets and those that are not counted also are represented through a change in money demand.

    secondly the other aspect is that why real money supply and demand rather than nominal

    it is clear that if i bought and you sold a house for $1 so asset demand and supply is $1 if you still are selling one house and i want one house but the prices have increased to $2 although the prices have increased i cant say that asset demand or supply has increased

    hence we take real measure that exclude the impact of inflation

    i hope i have made it a bit clear


  2. Please understand what is equilibrium. For that you have to know what are Law of Conservation and Law of Equilibrium. Please study any book on chemistry or physics. Law of Conservation states that when matter or energy or wealth as the case may be is changed from one form to another, value of transferor form equals value ( or quantity) of  transferee form and that matter or energy or wealth is neither created nor is it destroyed. That is the reason why when wealth in the form of real money supply is changed into wealth in the form of real money demand, according to law of conservation,

    real money supply = real money demand.

    Please study wealth the way chemists study matter and redefine economics as chemistry of wealth to have better insight.

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