Draw the graph · Macro · Money market
Digital payments spread
MDmoney demand
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MSmoney supply
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Drag a curve sideways, or use its arrows. A curve you do not move is a curve you are saying stays put. Make each shift clear enough that a reader could see it.
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Money demand shifts left. Money supply stays put.
Money demand is the amount people choose to hold to make their transactions. Better payment technology lets them get by with smaller balances at every interest rate, so money demand shifts left. The money supply is fixed, so the interest rate falls.
The nominal interest rate falls.
Common mistake. Students sometimes shift money supply, reasoning that apps 'create money.' They do not change the money stock. They change how much of it people want to hold.
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Lesson: The Money Market
Every prompt here is one shift. The course chains them: a lesson on why the curve moves, a graded drawing, and spaced review that brings back the shifts you get wrong.