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3 years ago

According to liquidity preference theory, money supply and money demand are balanced by adjustments of

Business

1 answer:

givi [52]3 years ago

5 0

Answer:

Nominal Interest rate

Explanation:

According to liquidity preference theory, money supply and money demand are balanced by adjustments of Nominal Interest rate. Suppose you have some money, you will decide to either keep it in cash or in the bank. If you keep the money in cash, the opportunity cost of keeping in cash is the interest rate earned if you would have kept the money in the bank. Bank offers the nominal interest rates and not the real interest rates. Bank rates are not adjusted for inflation. So if the interest rate on money increases the opportunity cost of holding money in cash increases. If money supply in the economy increases the demand for money will increase only by reducing the interest rate because then only people fir hold cash and demand higher money. So, money supply and money demand are balanced by adjustments of the Nominal Interest rate.

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A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate. The cost to order napkins is $200.00 per

ahrayia [7]

Answer:

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Explanation:

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2 years ago

Select sales companies offer of shares of stock in itself to anyone who is willing to pay $60 per share is

LiRa [457]

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3 years ago

Lower of Cost or Market The accountant for Murphy Company prepared the following analysis of its inventory at year end: Item Uni

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Answer:

$52,860

Explanation:

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Carrying value of the ending inventory is $52,860

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3 years ago

Which One of the following is true about intraperiod tax allocation?

Digiron [165]

Answer:

D. Its purpose is to relate the income tax expense to the items which affect the amount of tax.

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3 years ago

The finance minister of a developing country demands a heavy payment for the approval of a multi-million dollar contract with a

OverLord2011 [107]

Answer:

Extortion

Explanation:

Extortion is the act of threatening or forcing another party to give you something, most of the time money.

In this case the minister in the developing country is demanding for payment before giving approval for the multi-million dollar contract.

The threat the minister is using against the company is to not approve Thier contract.

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3 years ago