true or false: the higher the short-term interest rate, the lower the opportunity costs holding money
true or false: the higher the short-term interest rate, the lower the opportunity costs holding money
Homework Answers
The statement is False. This is because , the higher the short term interest rate , higher is the opportunity cost of holding money and the lower the short term interest rate , lower is the opportunity cost of holding money. It is the short term interest rate rather than the long term interest rate affecting the demand for holding money , that is , opportunity cost of holding money. When the interest rates ( short term) are higher the interest foregone in holding money is high ,so the opportunity cost is high.
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true or false: the higher the short-term interest rate, the
lower the opportunity costs holding money
When the interest rate falls: people desire higher money balances as the opportunity cost of holding...
When the interest rate falls: people desire higher money balances as the opportunity cost of holding money decreases. people desire lower money balances as the opportunity cost of holding money decreases. people desire higher money balances as the opportunity cost of holding money increases. people desire lower money balances as the opportunity cost of holding money increases.
At higher interest rates,____ of holding money is high -transaction costs -opportunity costs -benefits
At higher interest rates,____ of holding money is high -transaction costs -opportunity costs -benefits
Statements True False When the Fed increases the money supply, short-term interest rates tend to dedine....
Statements True False When the Fed increases the money supply, short-term interest rates tend to dedine. Actions that lower short-term interest rates will always lower long-term interest rates. Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States
"Holding other factors constant, a lower dividend payout ratio raises the growth rate. But the higher...
"Holding other factors constant, a lower dividend payout ratio raises the growth rate. But the higher growth rate does not necessarily increase the stock value." True or false? Select one: a. False b. True
The money demand curve is: O Upward sloping because the opportunity cost of holding money rises...
The money demand curve is: O Upward sloping because the opportunity cost of holding money rises with the interest rate. O Downward sloping because the opportunity cost of holding money is inversely related to the interest rate. Downward sloping because the opportunity cost of holding money rises as the interest rate falls. O Downward sloping because the opportunity cost of holding money rises as the interest rate rises.
QUESTION 6 The higher a higher, lower O b. lower, lower the nominal interest rate. st...
QUESTION 6 The higher a higher, lower O b. lower, lower the nominal interest rate. st of processing a loan, the the interest rate charged for the loan; the lawer the expected inflation rate, the O c. lower, higher o d higher, higher QUESTION 7 If you place $10,000 in a savings account that pays 3 percent interest per year and you leave all the money, principal plus interest earned, in the account for three years, approximately how much money...
1. Which of the following properly describes the interest-rate effect? a. A higher price level leads to higher money demand, higher money demand leads to higher interest rates, and a higher interest rate increases the quantity of goods and serv
1. Which of the following properly describes the interest-rate effect? a. A higher price level leads to higher money demand, higher money demand leads to higher interest rates, and a higher interest rate increases the quantity of goods and services demanded.b. A higher price level leads to higher money demand, higher money demand leads to lower interest rates, and a lower interest rate reduces the quantity of goods and services demanded.c. A lower price level leads to lower money demand, lower...
The money market interest rate paid by corporations that borrow short-term funds in a particular country...
The money market interest rate paid by corporations that borrow short-term funds in a particular country is typically: A.equal to the rate paid by that country’s government. B. slightly higher than the rate paid by that country’s government. c.mostly influenced by the demand for and supply of long-term funds in that country. d. set by the country’s central bank.
If at some specific interest rate the quantity of money demanded is less than the quantity...
If at some specific interest rate the quantity of money demanded is less than the quantity of money supplied, people will desire to buy interest-earning assets causing the interest rate to decrease. Select one: True False In recent years, the Fed has conducted policy by setting a target for the federal funds rate. Select one: True False A decrease in taxes is an expansionary fiscal policy designed to increase aggregate demand and reduce unemployment. Select one: True False If aggregate...
Explain fully how an easy money policy can lower the interest rate in the short-run but...
Explain fully how an easy money policy can lower the interest rate in the short-run but increase the interest-rate in the long-run. Be sure to distinguish between real and nominal interest rates.
Statements True False When the Fed increases the money supply, short-term interest rates tend to dedine. Actions that lower short-term interest rates will always lower long-term interest rates. Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States
The money demand curve is: O Upward sloping because the opportunity cost of holding money rises with the interest rate. O Downward sloping because the opportunity cost of holding money is inversely related to the interest rate. Downward sloping because the opportunity cost of holding money rises as the interest rate falls. O Downward sloping because the opportunity cost of holding money rises as the interest rate rises.
QUESTION 6 The higher a higher, lower O b. lower, lower the nominal interest rate. st of processing a loan, the the interest rate charged for the loan; the lawer the expected inflation rate, the O c. lower, higher o d higher, higher QUESTION 7 If you place $10,000 in a savings account that pays 3 percent interest per year and you leave all the money, principal plus interest earned, in the account for three years, approximately how much money...
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