money market interest rates

Question 1

what is the money market, graph and how interest rates effect

Answer 1

-trade of financial assets with a maturity of 1 year or less
-graph: interest rates and quantity of money. Dm and Sm(fixed)
-reserve requirement: to reduce interest rates you reduce reserve requirement: keep more increasing supply
-bank rate (rate at which commercial banks borrow): increase bank rate, increase interest rates: borrowing cheaper: higher money supply
-open market operations (buy/sell bonds): reduce interest rates, they buy bonds