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mario62 [17]
3 years ago
13

According to the theory of liquidity preference, if the supply of real money balances exceeds the demand for real money balances

, individuals will: Group of answer choices sell interest-earning assets in order to obtain non-interest-bearing money. purchase interest-earning assets in order to reduce holdings of non-interest-bearing money. purchase more goods and services. be content with their portfolios. PreviousNext
Business
2 answers:
harkovskaia [24]3 years ago
4 0

Answer:

According to the theory of liquidity preference, if the supply of real money balances exceeds the demand for real money balances, Individuals will purchase interest-earning assets in order to reduce holdings of non-interest-bearing money.

Explanation:

Liquidity preference theory states that securities with longer maturity dates should accrue higher interest or premium.

this theory was postulated by Keynes in support of his idea that the demand for liquidity holds speculative power. Therefore, investments that are more liquid are easier to cash in for full value.

Based on the foregoing, if the supply of real money balances exceeds the demand for real money balances, Investors will purchase interest-earning assets in order to reduce holdings of non-interest-bearing money.

Sedbober [7]3 years ago
3 0

Answer:

Sell interest-earning assets in order to obtain non-interest-bearing money

Explanation:

The liquidity preference theory states that investors prefer cash or highly liquid assets to long term assets that carry high risk.

When investors obtain long term assets the charge higher interest rates or premium in order to mitigate associated risk.

In this scenario when the supply of money is higher than demand, there is abundance of non interest bearing money that is highly liquid.

According to the liquidity preference theory investors will sell their interest bearing assets and go for assets with high liquidity (non Interest bearing money)

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When investors give computer instructions to sell automatically to avoid potential losses if their stock price dips to a certain
marysya [2.9K]

When investors give computer instructions to sell automatically to avoid potential losses if their stock price dips to a certain point, it is called program trading.

<h3>What is program trading?</h3>

Program trading is what create space or time for multiple trades to occur simultaneously.

It is an automated process that gives instructions to computers to sell when price of a stock goes down to prevent loss.

Learn more about program trading here: brainly.com/question/13955369

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6 0
2 years ago
You are an economic advisor to the president. You observe a decrease in gross investment. Assume the economy was operating at th
melomori [17]

Answer:

a. Increase in Net Exports, Increase in AD, real GDP will stay same

b. Excess Demand

c. Appropriate Contractionary Fiscal Policy : decrease tax & or increase government expenditure

d. Actions smooth business cycle by brining actual real GDP towards full employment

Explanation:

Aggregate Demand is the total value of goods & services all the sectors of an economy are planning to buy during a given period of time

Aggregate Demand [AD] = Consumption [C] + Investment [I] + Government Expenditure [G] + Net Exports [NX = Exports (X) - Imports (M)]

Aggregate Demand > Aggregate Supply at full employment level is Excess Demand. Aggregate Demand < Aggregate Supply at full employment level is Deficit Demand

Decrease in Investment leads to fall in Aggregate Demand. It creates Deficit Demand & decreases real GDP. It can be corrected through demand expansionary fiscal policy of decreasing taxes & increasing govt. expenditure.

Increase in exports leads to increase in net exports & in turn increase in aggregate demand. This causes Excess demand problem & real GDP will remain same (economy already at full equilibrium, GDP cant be increased more). Appropriate Fiscal Policy [Contractionary Fiscal Policy] includes decreasing taxes & or increasing govt. purchase.

These actions will smooth out business cycle by bringing actual real GDP back to full employment level.

5 0
3 years ago
after completing a client's transaction you take the opportunity to point out that she may benefit from the product or service .
xenn [34]

The correct answer is; Offer the customer some literature about the product to take with them.

Further Explanation:

If the customer is already using a product that your bank is offering, you can give them some literature such as pamphlets explaining your banks product. It will depend on your banks policy on giving out information to non-customers.

The information that you give the possible customer should include prices and any perks that they may receive for changing banks. In addition to giving the person literature, you can offer to explain your product in more details and the reasons why they should change banks.

Learn more about banking at brainly.com/question/9608829

#LearnwithBrainly

7 0
3 years ago
The knowledge and skill that enable workers to be productive is called a) human capital b) talent capital c) human supply d) tal
Natalka [10]
Looks like the answer is A) human capital
5 0
3 years ago
Fixed vs Variable cost preference. Bates operates a kiosk at a local mall, selling duck calls for $30 each. The variable cost to
GuDViN [60]

Answer:

Option 2 should be selected

Explanation:

Using a rational approach which option most benefit and have a minimum cost. We will use the break-even level here to decide which option should be selected.

Option 1

Price per call = $30

Variable cost per call = $18

Contribution = Sales  - Variable cost = $30 - $18 = $12

Fixed Cost = $15,000

Break-even point = Fixed cost / Contribution per call = $15,000 / $12 = 1,250 calls

Option 2

Price per call = $30

Variable cost per call = $18 + ( $30 x 10% ) = $18 + $3 = $21

Contribution = Sales  - Variable cost = $30 - $21 = $9

Fixed Cost = $9,000

Break-even point = Fixed cost / Contribution per call = $9,000 / $9 = 1,000 calls

Difference  = 1,250 calls - 1,000 calls = 250 calls

Option 2  is better option because it take 250 less calls to reach at break-even in the month. It should be selected.

8 0
3 years ago
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