When interest rates on treasury bills and other financial assets are low, the opportunity cost of holding money is <u>low </u>so the quantity of money demanded will be <u>high</u>.
If interest rates go up, the demand for money will go down. Once it equals the new money supply, there will be no more difference between how much money people are holding and how much they want to keep, and the story is over. This is why (and how) a decline in the money supply raises interest rates.
As interest rates rise, the amount of money demanded decreases because the opportunity cost of holding money decreases. As interest rates rise, aggregate demand shifts to the left. The interest rate effect arises from the idea that higher price levels reduce the real value of household holdings.
Learn more about interest rates here: brainly.com/question/1115815
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Answer:
1. describe the world accurately
2. predict cause and effect
3. state its assumptions clearly
Explanation:
A good model can be defined as a physical representation of something that is morally good, ideal and perfect.
A good model should;
I. Describe the world accurately: it should be all encompassing in its description of the world at large.
II. Predict cause and effect: it should state why there is a reaction to an action.
III. State its assumptions clearly: it should be concise.
The answer: Kelly owns a massage studio and is offering free 15-minute massages to the participants of a popular 5K race event. This is an example of advertising
Answer:
A) Benefit farming communities in Congo
Explanation:
A policy of paying more than strictly necessary to poor farmers in Congo directly benefits those communities because it allows them to have more income available.
None of the other three answers address this effect. B) is wrong because the firm is incurring in higher wage costs, which does not benefit the company's bottom line. C) is wrong because farming is not part of the third sector of the economy, it is part of the first sector or primary sector, and D) is wrong because we do not have enough information to assume that those jobs in Congo were previously located somewhere else.
