What does the demand curve for money look like? Why?

What will be an ideal response?


If the quantity of money is on the horizontal axis and the interest rate on the vertical axis, the demand curve for money is a downward sloping curve or line. People hold money because of money's role as a medium of exchange and a store of value. The lower the interest rate the lower the cost to hold money balances since the forgone interest is lower. People will hold more balances when the price of doing so is less, so the demand curve for money slopes down.

Economics

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Under the Soviet system of communism,

A) technological progress was slow because managers had little incentive to develop new technologies. B) managerial pay was determined by the extent to which managers could lower the per-unit costs of production. C) the per-worker production function in the Soviet Union shifted up more rapidly than production functions in other countries. D) competitive pressures in the Soviet Union allowed the country's technological progress to keep pace with the rest of the world.

Economics

A recent economics graduate is looking for a position as an industrial economist. During the period this individual starts looking for a job and ultimately finds one, he may be classified as:

a. seasonally unemployed. b. frictionally unemployed. c. cyclically unemployed. d. structurally unemployed. e. occasionally unemployed.

Economics

Among the accomplishments of Nobel Laureate Simon Kuznets is his pioneering research on

a. the sunspot theory of cycles b. war-induced cycles c. population-induced cycles d. innovation cycles e. housing cycles

Economics

When economies of scale are important, imposing competition by splitting a monopolistic firm into many rival units will

a. lead to an increase in the per-unit cost of production in the industry. b. not affect per-unit costs but will affect demand conditions. c. generally increase the social efficiency of production. d. cause the industry demand curve to increase (shift to the right).

Economics