explain just how each the the following would influence the amount of money demanded, and also indicate whether each change would cause a movement along the money demand curve or a shift of the money need curve.a. Momentary interest prices rise native 5% to 30%b. Every price fall by 10%c. Brand-new wireless modern technology automatically dues supermarket acquisition to credit transaction cards, eliminating the have to stop in ~ the cash register.d. In order to avoid paying taxes, a large underground economy creates in which workers are paid their incomes in cash quite than through check.

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a. By increasing the opportunity expense of holding money, a high interest price reduces the quantity of money demanded. This is motion up and also to the left along the money need curve.b. A 10% autumn in price reduces the amount of money demanded at any type of given attention rate, moving the money demand curve leftward.c. This technology change to reduce the quantity of money request at any given interest rate, therefore if it move the money need curve leftward.d. Payments in cash require employers come hold more money, enhancing the amount of money demanded at any kind of given interest rate. Therefore it shifts the money demand curve rightward.
How will certainly each the the following influence the opportunity cost or benefit of holding cash? Explain.a. Merchants charge a 1% dues on debit/credit card transactions for purchases of much less than $50b. To attract an ext deposits, financial institutions raise the attention paid top top six-month CDs.c. Actual estate prices fall significantly.d. The price of food rises significantly.
a. A 1% acquisition fee ~ above debit/credit card transactions for purchases less than $50 rises the advantage of holding cash because consumers will save money by paying with cash.b. Rise in the attention paid ~ above six-month CDs raises the opportunity price of stop cash since holding cash needs forgoing the greater interest paidc. A fall in real estate prices has no effect on the opportunity price or benefit of stop cash because real estate is an illiquid asset and therefore isn"t relevant in the decision of how much cash to hold. Also, actual estate transactions are normally not brought out utilizing cash. D. Since many purchases of food space made in cash, a far-reaching increase in the price of food rises the advantage of holding cash.

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A readjust in i beg your pardon of the adhering to will change the money demand curve?I. The aggregate price levelII. Real GDPIII. The interest rate a. Ns onlyb. II onlyc. III onlyd. I and also II onlye. I, II and III
Which that the complying with will diminish the need for money?a. Rise in the attention rateb. Inflationc. Boost in genuine GDPd. Rise in the accessibility e. The fostering of Regulation Q
What will happen to the money supply and the equilibrium interest rate if the federal Reserve selling Treasury securities?a. Money supply:increase - equilibrium interest:increaseb.money supply: diminish - equilibrium interest:increasec.money supply:increase - equilibrium interest: decreased. Money supply: decrease - equilibrium interest:decreasee. Money supply: diminish - equilibrium interest:no change
Which that the complying with is true about short-term and also long-term interest rates?a. Temporary interest prices are always above long-term interest rates. B. Short-term interest prices are always below long-term interest rates.c. Short-lived interest prices are constantly equal to irreversible interest rates.d. Temporary interest prices are an ext important for determining the need for money,e. Irreversible interest prices are more important because that determining the demand for money.
The amount of money request rises (that is, there is a movement along the money demand curve) whena. The aggregate price level increasesb. The accumulation price level fallsc. Genuine GDP increasesd. New technology makes banking easiere. Temporary interest rates fall
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