Beruflich Dokumente
Kultur Dokumente
Kovid Bhardwaj*
*
MBA, Indian Institute of Management Lucknow
Keynes gave us three motives why a citizen of a country holds An immediate effect of the demonetization is to suck a lot
the currency of that country: of currency out of immediate circulation. No government
in the world can replace 86% of currency in circulation
1. The Transactions Motive with new one on near short term basis. This feat becomes
even tougher when the goal is to address the black money
Demand for money arising from the use of money in as then you cannot involve a lot of entities to this event
making regular payments. The cash inflow and cash outflow without leaking the agenda so readiness becomes a
for a person is not synchronized. You will never receive challenge. Also such a feat becomes even more
cash at the same time when you have to pay it out to complicated with a developing country where most of
someone else. So to cover this lag people hold money. transactions are cash based.
𝑖 = (𝐴 / 𝑏) – (𝑌 / 𝛼𝐺 𝑏) (1)
Figure 3
To find the new equilibrium in the money markets we look
at the LM curve. The original equation for LM curve is
given by:
Figure 5