1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
IgorLugansk [536]
3 years ago
15

When the interest rate increases, the opportunity cost of holding money Select one: a. decreases, so the quantity of money deman

ded increases. b. decreases, so the quantity of money demanded decreases. c. increases, so the quantity of money demanded decreases. d. increases, so the quantity of money demanded increases.
Business
2 answers:
LenaWriter [7]3 years ago
6 0

Answer: c. increases, so the quantity of money demanded decreases.

Explanation: The quantity of money demanded increases and decreases with fluctuations in interest rate which can be seen as the price of money/the cost of borrowing money. An increase in the interest rate increases the opportunity cost of holding money and leads to a reduction in the quantity of money demanded this is because quantity of money demanded varies inversely with the interest rate. The Central Bank of a country adjusts interest rates to keep inflation, the demand for money, and the health of the economy in a certain range.

Arada [10]3 years ago
4 0

Answer:

C.

Explanation:

A higher interest rate means greater loss in money value being held by an individual. This is because the money would yield higher earnings by being in a savings account. Consequently, higher interest rate means less demand for money.

You might be interested in
If you wanted to find the job description for a certain job, where should you look?
Anna [14]
Decide your job choice.
Find a business that has openings for the jobs.
You can to their online page for information about the job.
Then, you can have a job interview online or face to face.
3 0
2 years ago
Compute the two-year nominal interest rate using the exact formula and the approximation formula for each set of assumptions lis
gregori [183]

Answer:

a) 2.5%

b) 6%

c) 3.5%

Explanation:

The Formula to be used is the <em>habitat hypothesis </em>

as stated in the document attached below

a)  it = 2%; it+1 =3%

i_{2,t} = 0 + ( 2 + 3 ) / 2

    = 2.5% ( two year nominal interest rate )

b) it = 2%;  it+1+1 = 10%

i_{2,t} = 0 + ( 2 + 10 ) / 2

     = 6% ( two year nominal interest rate )

c) it = 2%;  1t+1 = 3%. ∝₂,t = 1%

i_{2,t}  = 1 + ( 2 + 3 ) / 2

     = 1 + 2.5 = 3.5%

8 0
3 years ago
Wait unemployment and search unemployment are both types of:
serious [3.7K]

Answer:

Option A. frictional unemployment, is the right answer.

Explanation:

Option A is correct because frictional unemployment is referred to as a situation when people change their job and remains unemployed during this period. For example, a person leaves his earlier job and starts finding a new job. It took him one month to find a new job, therefore, this period of one month during which he was unemployed and looking for a job is considered to be as the frictional unemployment.

6 0
3 years ago
What year began the worst economic recession since the great depression?.
Kamila [148]
2007 to the year of 2009
4 0
2 years ago
During 2017 the inflation rate increased slightly but remained in the​ "comfort zone" and the unemployment rate was low. Why mig
goblinko [34]

Answer:B It thought that unemployment was a greater problem than the rising inflation rate

Explanation:

Inflation is the continuous rise in price of goods and services which is as a result of large volume of money in circulation used for the few available goods and services.

Unemployment is a situation where all that are willing and capable of being employed are unable to get employment.

In the above scenario lowering Interest rates will increase the volume of money in circulation which will invariably increase inflation and we equally increase level of investment as the cost of fund will be cheaper thereby lowering unemployment.

This action means unemployment is of greater problem than rising inflation.

It does not mean inflation is of more concern than unemployment otherwise it will have increase the interest rate, it will make loanable fund demanded to exceed supply and the quantity of money in supply will increase.

7 0
3 years ago
Other questions:
  • The cost of an asset is $ 1,020,000​, and its residual value is $ 100,000. The estimated useful life of the asset is ten years.
    7·1 answer
  • according to the law of supply if the price of apple juice rises producers of apple juice will be willing and able to.
    11·1 answer
  • A leftward shift of the supply curve for oil in the united states is most likely to result from:
    14·1 answer
  • To minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consid
    11·1 answer
  • A person has a comparative advantage in activity X when that person's: O opportunity cost of performing that activity is very hi
    14·1 answer
  • When economists study aggregate supply and aggregate demand, what are they studying? the supply and demand of a good produced by
    11·2 answers
  • During a severe recession Congress passes legislation to cut taxes, this would be an example of a(n): g
    15·1 answer
  • The Category Profile that involves evaluating the major forces and trends that are impacting an industry: including pricing, com
    12·1 answer
  • You are choosing between two goods, X and Y, and your marginal utility from each is as shown in the table above. If your income
    6·1 answer
  • Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 2 bars and the price is $5. In year 2
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!