When the short-term interest rate _, the opportunity cost of holding money _, and the quantity of money individuals want

Question

Alexxx [7]

4 years ago

15

When the short-term interest rate _, the opportunity cost of holding money _, and the quantity of money individuals want

to hold _____.

Social Studies

1 answer:

Neporo4naja [7] · Answer 1 · 2022-01-04T02:30:26+03:00

Answer:

falls; falls; rises

Explanation:

Oportunity cost of holding money refers to the potential profit that people can lost by holding their money rather than investing it.

When short-term interest rate falls, the amount of incomes that the people could get by investing their money to bonds or stocks tend to fall too. (this make the opportunity cost of holding money falls too )

When this happen, people have the tendency to hold on to their money until the short-term interest rates fall again.

When the short-term interest rate _____, the opportunity cost of holding money _____, and the quantity of money individuals want

When the short-term interest rate _, the opportunity cost of holding money _, and the quantity of money individuals want