MONEY MARKET

The money market is where the Federal Reserve and the users of money interact, which determines the nominal interest rate (i%) and is made up of two parts:

• Money demand (MD) which comes from households, firms, government, and the foreign sector
• Money supply (MS) which is determined only by the Federal Reserve

Money demand is divided into three parts:

• Transaction demand which is the demand for money as a medium of exchange (independent of interest rate)
• Asset demand which  is the demand for money as a store of value (dependent of the interest rate)
• Total money demand
• MD is downward sloping because at high interest rates people are less inclined to hold money and more inclined to hold stocks and bonds
• At lower interest rates people sacrifice less when they hold money

Money supply is determined by the Federal Reserve because the Federal Reserve has control over the supply of money

If you still don't understand, here's some vids 2 help you :) :

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Demand curve:

https://www.youtube.com/watch?v=LwLh6ax0zTE

Equilibrium nominal interest rates:
https://www.youtube.com/watch?v=zPQyInnqvrI