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NemiM [27]
3 years ago
5

According to the liquidity preference model: a. an increase in the money supply lowers the equilibrium rate of interest. b. a de

crease in the money supply lowers the equilibrium rate of interest. c. the money supply curve is a horizontal line. d. the demand for money curve is a vertical line.
Business
2 answers:
Gnom [1K]3 years ago
8 0

Answer:

The correct answer is a. an increase in the money supply lowers the equilibrium rate of interest.

Explanation:

The preference for liquidity is a recurring expression in the study of economics, especially important in Keynesian theory and which assumes that people consider it better to have their savings in liquid form, that is, as money.

This concept, very recurrent in macroeconomics, assumes the existence of an outstanding trend in human and rational behavior whereby individuals prefer to have their assets in an accessible and liquid way compared to other possibilities. Originally, the definition of liquidity preference was coined by Keynes when explaining the concept of monetary demand and its mode of action.

This theory suggests that there is a direct relationship between interest rates or rates and people's preferences in terms of liquidity, since both keeping money effectively and not doing so carry certain costs for them. In other words, saving money can translate into financial gain.

For Keynes, there were three reasons why the individuals who make up the money demand opt for liquidity and money: transactions, caution and speculation.

Zigmanuir [339]3 years ago
3 0

Answer:

A) an increase in the money supply lowers the equilibrium rate of interest.

Explanation:

The liquidity preference theory states that investors, companies or even common individuals will require a higher return rate from long term investments or projects since they all prefer liquidity. In order to offset the preference for liquidity, higher returns must be obtained. This concept is based on the premise that investors are risk adverse, and liquid investments will always be much safer than illiquid investment which carry much higher risks. Therefore, illiquid investments must yield higher returns in order to a tract investors.

An increase in the money supply will always decrease the price of money (interest rate) simply because a higher supply lowers the equilibrium price. If investors hold too much cash, they will not face risks, but they will also not be earning significant profits. So they have to balance out the risks of investing and the safety of cash or near cash investments. The more cash available, the lower the interest rate, and the more long term riskier investments will be made.

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Leahy Corp. sells $300,000 of bonds to private investors. The bonds are due in five years, have an 6% coupon rate, and interest
Damm [24]

Answer:

$326,948 ,

Explanation:

The computation of the proceeds leahy received from the investors is shown below:

Present value of the bonds = Stated semi-annual interest x PVIFA 4%, 10 years + Maturity amount x PVIF 4%, 10 years

= ($300,000 × 6% ÷ 2) ×  8.98258 + $300,000 x 0.820348

= $326,948

Refer to the PVIFA table and PVIF table

Moreover in the semi annual, the rate of interest is half and the time period is doubles

3 0
4 years ago
The _____, which prohibited employers from using unfair labor practices, declared that the official policy of the u.s. governmen
Novay_Z [31]

The <u>Wagner act</u>, which prohibited employers from using unfair labor practices, declared that the official policy of the u.s. government was to encourage collective bargaining.

<h3><u>What is the Wagner Act?</u></h3>

The Wagner Act, officially known as the National Labor Relations Act of 1935, is the most significant labor law passed in the United States during the 20th century. Its principal goal was to make it lawful for most workers—with the notable exception of domestic and agricultural workers—to form or join labor unions and engage in collective bargaining with their employers.

The Wagner Act, sponsored by New York's Democratic senator Robert F. Wagner, made the federal government the exclusive arbiter and regulator of labor relations. It established the National Labor Relations Board (NLRB), a permanent body of three members (later expanded to five), with the authority to hear and decide labor disputes through quasi-judicial processes.

Learn more about the Wagner act with the help of the given link:

brainly.com/question/25970080

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8 0
2 years ago
During the months of January and February, Hancock Corporation sold goods to three customers. The sequence of events was as foll
DedPeter [7]

Answer:

$2,362

Explanation:

The computation of the net sales for the two months is shown below:

= Sale value of goods to S green + Sale value of goods to M Munoz + Sale value of goods to R. Reynolds - sales discounts

= $1,400 + $500 + $490 - $28

= $2,362

The sales discount is

= Sale value of goods to S green × discount percentage

= $1,400 × 2%

= $28

5 0
4 years ago
A downward-sloping experience (or learning) curve is indicative of ________. Group of answer choices the low quality of a compan
andrew11 [14]

Answer:

<h2>The answer in this case is the last option given in the answer choices or list which is the falling unit production cost of a company.</h2>

Explanation:

  • An experience or learning curve is a graphical curve which shows the relationship between the per unit production cost of any good or service incurred by any firm or company and the overall volume or quantity of output produced by the firm or company.
  • A downward sloping experience or learning curve implies a negative or inverse relationship between the per unit production cost of any firm or company and the total volume or quantity of output produced by it.
  • When the experience or learning curve is downward sloping,it essentially implies that as the firm or company expands its overall production or output level,it gains increasing experience or learning on how to control and reduce the average cost of production and simultaneously increase production level which can generate higher sales revenue,thereby,increasing the profit level.This basically refers to economies of scale in Microeconomics and is indicative of long term productive efficiency which is desirable by any firm or company to ensure sustainable profitability.
4 0
4 years ago
16. What size paper should you use for a legal document?
hichkok12 [17]

The answer is C.

This is a legal document because layers like longer than normal paper so they could more notes into a normal looking paper to look professional.

Best of Luck!

8 0
3 years ago
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