What factors affect the demand for money?

What will be an ideal response?


Four factors influence the demand for money. First is the price level. An increase in the price level increases the nominal demand for money. Second is the interest rate. An increase in the interest rate raises the opportunity cost of holding money and decreases the quantity of money demanded. Third is real GDP. An increase in real GDP increases the demand for money. Fourth is financial innovation. Innovations that lower the cost of switching between money and other assets decrease the demand for money.

Economics

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Data on productivity gains in the 1990s in the United States strongly suggest that a significant share of those gains was attributable to:

A) improvements in education and training. B) improvements in information technology. C) substantial reductions in labor costs. D) increased demand for goods and services.

Economics

The demand curve that a monopolist faces

a. is steeper than the market demand curve b. is the same as its marginal revenue curve c. is controlled by the government d. does not exist e. is the same as the market demand curve

Economics

If two goods are complementary, a(n)

a. decrease in the price of one good will cause a decrease in the demand for the other b. decrease in the price of one good will cause an increase in the demand for the other c. increase in the price of one good will cause an increase in the supply of the other d. increase in the price of one good will cause a decrease in the supply of the other e. increase in the price of one good will cause an increase in the demand for the other

Economics

What can be said about the demand and supply of natural resources?

a. The quantity demanded of a natural resource will generally be less responsive to a change in price in the long run than in the short run. b. The supply of a natural resource will generally be more responsive to a price change in the long run than in the short run. c. The supply of a natural resource is fixed by nature; it cannot be responsive to a price change in the long run. d. None of the above is correct.

Economics