how might this change in interest rates and the supply of money affect the value of money? What happens in the circular-flow-diagram if borrowing money becomes expensive for businesses and consumers? What happens to employment?
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how might this change in interest rates and the supply of money affect the value of money? What happens in the circular-flow-diagram if borrowing money
becomes expensive for businesses and consumers? What happens to employment?
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- Which of the following statements represent a use of money that is not consistent with its definition? "I got some money at the ATM with my debit card," "I just used my credit card as money to buy a new television." "I wrote a check on my deposit account to pay for dental services." "I will accept either currency or gold as money for the purchase of my house."The figure below is a slightly-modified version of the circular flow diagram from Chapter 5. The arrows in this diagram represent the flow of money, but I want you to redraw the diagram by reversing the direction of all of the arrows and clearly labeling what real thing is flowing in the other direction. To be clear: there should not be any flows of money in your diagram; it should show the flow of goods and services or factors of production, etc. Make sure you label it clearly enough that I can tell that you know what real flow balances out the money flow in the original diagram.How does the increase of prices of goods affect the purchasing power of money?
- Q.1.5 Which one of the following statements is NOT true? (a) Money is the most liquid asset.(b) Money is a store of value.(c) Money is a unit of account.(d) Money is another term for income.Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.Why do economists insist on emphasizing the difference between money and income? Why is this difference important in macroeconomics?"If you were on an island with 10 other people and there were no money, do you think that money would emerge on the scene
- When the interest rate falls , other things remaining the same, what change occurs in the market for money? The opportunity cost of holding money _______ and _______. A. rises ; the demand for money decreases B. rises ; the quantity of money demanded decreases C. falls ; the quantity of money demanded increases D. falls ; the demand for money increasesuse a diagram to illustrate the demand and supply of moneyAccording to your graph, the equilibrium value of money is , therefore the equilibrium price level is Now, suppose that the Fed reduces the money supply from the initial level of $3.5 billion to $2 billion. In order to reduce the money supply, the Fed can use open market operations to the public. Use the purple line (diamond symbol) to plot the new money supply (MS2 ). Immediately after the Fed changes the money supply from its initial equilibrium level, the quantity of money supplied is than the quantity of money demanded at the initial equilibrium. This contraction in the money supply will people's demand for goods and services. In the long run, since the economy's ability to produce goods and services has not changed, the prices of goods and services will and the value of money will
- Which of the following will cause the demand curve for money to shift to the right? (a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.By using graphs, show and explain how an increase in money supply can affect the goods market by taking the link between two markets into account.Suppose you receive Tk. 10,000 from your grandmother and deposits the money in a saving account. your grandmother gave you the money by writing a check on her saving account. Would the maximum increase in the money supply still be what you found it to be in part a) where you received the money from the sky? Why or why not? can anyone explain please why it will change
