In our textbook Principles of Macroeconomic, chapter 10 touches on the demand for money and the relationship with the money markets, bond markets and interest rates. The demand for money is defined as the relationship between the amount of money consumers want to hold and the circumstances that determine the quantity. In an economy, money enables people to consume goods and services. Money is needed to be able to complete transactions, for instance, I need to buy food week after week, as long as I am alive; this requires me to keep money on hand to complete my purchases, this is called transactions demand for money. I hold money because I expect the food purchases week after week.
Also, in every economy there are circumstances that