There are several motives for holding assets in the form of money. What are they? Provide an example of each
There are three main reasons for holding money:
a . transaction purposes for facilitating exchange - groceries, utilities, clothing
b. precautionary purposes for unexpected expenses - medical emergencies; home repairs; auto repairs
c. asset purposes for easy conversion into goods and services (liquidity) - money market account balances to be used later for long-term investments
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A decrease in the price level in an economy implies that _____
Fill in the blank(s) with the appropriate word(s).
Rent seeking
A) is unlikely the more heavily engaged government planners are with the economy. B) is more likely where institutions are strong. C) is not likely to lead to waste and efficiency. D) is more likely when government policy creates something of value that government officials are charged with distributing.
Considering the value of a financial instrument, the bigger the size of the promised payment the:
A. less valuable the financial instrument because risk must be greater. B. longer an investor has to wait for the payment. C. greater the risk. D. more valuable the financial instrument.
The manager of Viking Sports finds that the price elasticity of baseball bats is ?0.77. He wants to hold a sale to get rid of his inventory. What will you advise him?
What will be an ideal response?