Aggregate Money Demand Aggregate money demand The total demand for money by all households and firms in the economy It is determined by three main factors Interest rate It reduces the demand for money Price level It raises the demand for money. Real national income It raises the demand for money Copyright C 2003 Pearson Education, Inc Slide 14-11Copyright © 2003 Pearson Education, Inc. Slide 14-11 Aggregate Money Demand ▪ Aggregate money demand • The total demand for money by all households and firms in the economy. • It is determined by three main factors: – Interest rate – It reduces the demand for money. – Price level – It raises the demand for money. – Real national income – It raises the demand for money