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What are the characteristics of a developing nation? we're going to list two basic avenues of economic growth available to such a nation.
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We're going to state and explain the obstacles that dvc's face in breaking the poverty barrier.
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And we're going to use the vicious circle of poverty concept to outline steps a dvc might take to initiate economic development.
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The basic determinant of the transactions demand is nominal gdp.
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The larger the total value of the goods and services exchange, the larger is the amount of the amount.
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Amount of money demanded for these transactions.
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The basic determinant of the asset demand for money is interest rate.
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The asset demand varies inversely with the interest rate.
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In other words, the higher the interest rate, the smaller the amount of money demanded as an asset.
00:49
The two demands combined together to determine total demand for money.
00:54
The equilibrium interest rate is determined by total money demand and money supply.
00:59
The point where money demand is equal, is exactly equal to money supply is the equilibrium interest rate...