Answer:
1. level of nominal GDP.
2. interest rate.
3. horizontal sum of the transactions demand for money and the asset demand for money.
4. at the intersection of the total demand for money curve and the supply of money curve.
5. the equilibrium interest rate will rise.
Explanation:
In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.
Simply stated, money refers to any asset which can be used to purchase goods and services by customers.
This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.
Additionally, the rate at which an asset can be used to purchase any goods or services refers to its liquidity. Thus, liquidity is a quality or characteristics of money as a medium of exchange. Therefore, money is a generally accepted medium of exchange around the world.
The three (3) main functions of money all over the world are;
I. Medium of exchange.
II. Unit of account.
III. Store of value.
Some of the characteristics of money includes the following statements;
1. The basic determinant of the transactions demand for money is the level of nominal GDP.
2. The basic determinant of the asset demand for money is the interest rate.
3. Total money demand is the horizontal sum of the transactions demand for money and the asset demand for money.
4. The equilibrium interest rate in the money market is determined at the intersection of the total demand for money curve and the supply of money curve.
5. If there is an increase in the total demand for money, the equilibrium interest rate will rise.
