The Demand For Money Has Been An Essential Part Of Economics

I. Introduction The demand for money has been an essential part of economics from the beginning of economics, even though minimal attention was given to it before the 1920s. This apparent lack of thought appears to have dramatically changed since the Great Depression of early 1930’s. These crises have lured special attention in monetary theory and consequently an equally particular attention has been focused on the demand for money. Today, over sixty years after these crises, interest on the causation of the failure of governments and depression, and the monetary authorities to prevent it happening. This importance rises to a crest whenever the economy of other countries declines or when our domestic economy enters a recession and/or depression. These events can raise issues such as what are the duties of monetary policy in causing an international or domestic economic boom or recession, who holds money, and why is it held? The debate usually centers on whether effortless or strict monetary p olicies are preferable. Strictly speaking, should credit and money be ample and cheap or limited and overpriced? These controversies call for an applicable analysis of how money is used and the functioning of monetary policy instruments. This is more so for developing countries where they face problems of growth and development and appear to be of a precise nature and are tied down by structural rigidities and bottlenecks. The problem in the developing countries is how more or lessShow MoreRelatedVenezuela Economy Essay1233 Words   |  5 PagesEconomic Analysis for Business Assignment Examine the last ten years of the Venezuelan economy Part One Venezuela is currently facing the worst economic crisis in history. According to the International Monetary Fund, it has negative growth of -8%, the worst in the world and the worst inflation rate (482%). 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