# Money Demand

*Macro & Economy — Finicade finance glossary*

How much cash people and firms want to hold rather than invest — rising when they value liquidity, falling when interest rates make holding cash costly. It's half of what sets interest rates.

**Related terms:** [Money Supply](https://finicade.com/glossary/money-supply), [Interest Rate](https://finicade.com/glossary/interest-rate), [Liquidity Trap](https://finicade.com/glossary/liquidity-trap)

**Taught in:** Macro & Markets — Money & the Interest Rate

Source: https://finicade.com/glossary/money-demand