# Why does the demand for central bank money shifts to the right with an increase in the reserve rateo?

Defining the demand for central bank money as $$[c + \theta (1-c)]M^d$$, where c = percentage of money people keep as currency, and $$\theta$$ the reserve rateo, I don't understand why, as my book states, an increase in either c or $$\theta$$ would result in a right shift of the curve.

My reasoning is: $$[c + \theta (1-c)]$$ get's higher and $$M^d$$ is a negative sloped function, therefore $$M^D$$ should get steeper.

Well this depends on parameters of $$M^d$$, but for reasonable parameters $$M^d$$ always shifts to the right. I assume your textbook uses linear money demand for example $$M^d = c - b i$$ and so on.
Denote $$[c+θ(1−c)] = \gamma$$, then for linear downward sloping demand we have:
$$\gamma M^d = \gamma c - \gamma bi$$
if $$\gamma$$ increases demand shifts to the right for any parameters save $$c=0$$ or $$\gamma=0$$ (assuming all parameters have to be non-negative). Demand will also become steeper as long as $$b >0$$ but you will always