What is the abbreviation for demand for money? 

Demand for money

The demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits. It can refer to the demand for money narrowly defined as M1, or for money in the broader sense of M2 or M3. Money in the sense of M1 is dominated as a store of value by interest-bearing assets. However, money is necessary to carry out transactions; in other words, it provides liquidity. This creates a trade-off between the liquidity advantage of holding money and the interest advantage of holding other assets. The demand for money is a result of this trade-off regarding the form in which a person's wealth should be held. In macroeconomics motivations for holding one's wealth in the form of money can roughly be divided into the transaction motive and the asset motive. These can be further subdivided into more microeconomically founded motivations for holding money. Generally, the nominal demand for money increases with the level of nominal output and decreases with the nominal interest rate. The real demand for money is defined as the nominal amount of money demanded divided by the price level.

see more »