This week, we will think about money and banking. Economists tend to think of the country's financial system as the economy's circulatory system, because it helps other aspects of economy, perataining to financial transations as well as the real economy, to occur. The economy grows faster if there is more money available, more cheaply, to spend on goods and services and to invest.
The discussion question this week speaks to those issues, by asking you to distinguish between the transactions demand for mnoey and the asset demand for money. Define each carefully in your own minds, so you will know what examples to choose.