Why would the transactions motive and the precautionary motive for holding money both tend to vary directly

Question:

Why would the transactions motive and the precautionary motive for holding money both tend to vary directly with the price level? Why would the quantity of money people desire to hold for both motives tend to vary inversely with interest rates?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Exploring Economics

ISBN: 9781439040249

5th Edition

Authors: Robert L Sexton

See More Books

Question Posted: Feb 07, 2013 05:55 AM

See More Questions

Why do bond prices vary inversely with interest rates?
Why bond prices and interest rates are inversely related?
Why is manning level inversely correlated with automation level in a manufacturing system?
The graph of f is given. (a) Why is f one-to-one? f is one-to-one because it passes the ---Select--- ? (b) What are the domain and range of f ? ?1 ?(Enter your answers in interval notation.) domain ?...
Describe a medicinal or health-related application for each of the following compounds: NaF, Li2CO3, Mg(OH)2, CaCO3, BaSO4, Al(OH)2NaCO3. (You would need to do a Web search for some of these...
For a K + ?Cl ? ion pair, attractive and repulsive energies EA and ER, respectively, depend on the distance between the ions r, according to For these expressions, energies are expressed in electron...
Calculate the net present value and investor's rate of return in Example 19.1 if the product life cycle is extended from three to five years. All other input data remain unchanged. Data From Example...
Valpaige Company is an industrial machinery and equipment manufacturer with several production departments. The company employs automated and heavy equipment in its production departments....
Forensic Psychology's Role in the Legal SystemResources PSYC Discussion Participation Scoring Guide . In this unit, you were introduced to forensic psychology as a subfield of psychology as well as...
The Summers Sporting Goods Shop presents the following data for two types of racquetball gloves, leather and fabric, for 19A and 19B. 19A 198 Units Per unit Amount Units Per unit Amount Sales: 12,000...
In which direction would the money supply change if? a. The Fed raised the reserve requirement? b. The Fed conducted an open market sale of government bonds? c. The Fed raised the discount rate? d....
In the move from a below equilibrium interest rate to the equilibrium interest rate, what happens in the bond market and the loan market? In the move from an above equilibrium interest rate to the...
The following graph was created using Stat Crunch with data from AutomobileMag.com. The graph shows U.S. automobile sales, in automobiles sold, by manufacturer, for the year 2018. The total sales for...
Describe the need for alignment between sales department, operation department and marketing department
XYZ Company sold a product for $20,000 in October that includes a 24-month warranty for repairs. XYZ Company has concluded from prior years that the average cost of repairs over the warranty period...
Water Corporation distributes property valued at $315,000 and with a basis of $220,000 to a shareholder in a qualifying stock redemption. The property is subject to a liability of $160,000 that the...
On May 1, 20X1, Riverside Company sold a plasma screen TV and a TWO-year maintenance agreement to a customer for a joint price of $2,000. Riverside collected all the cash up front on May 1, the...
if a loaf of bread costs $2.50 today and next year it costs $2.90, What is the yearly increase of a loaf of bread? And what's your guess for the year after?
Create the modular designs in Problems 4752. (19, 2)
Is it a breach of fiduciary duty for a director of a real estate investment trust (REIT) negotiating a joint venture on behalf of the REIT with another director for the development of a portfolio of...
One kg of liquid n-octane (C8H18) is placed in a closed rigid container with 50% excess air at 100C and 1 bar. It undergoes an isothermal process in which it reacts and completely combusts to form...
Equation tells us that to reduce a current account deficit a country must increase its private saving, reduce domestic investment, or cut its government budget deficit. Nowadays, some people...
Explain how each of the following transactions generates two entriesa credit and a debitin the American balance of payments accounts, and describe how each entry would be classified: a. An American...
A New Yorker travels to New Jersey to buy a $100 telephone answering machine. The New Jersey Company that sells the machine then deposits the $100 check in its account at a New York bank. How would...
Exploring Variable Length Parameter Lists The file Parameters.java contains a program to test the variable length method average from Section 7.5 of the text. Note that average must be a static...
How would I write a test case for the following steps so that the test cases run properly @Test void dequeueItemsHasRightValuesAndSize() { Queue testQ = new Queue (); int result; enqueueValues(testQ,...
Analyse the quality of the Java codes below public static boolean leap(int y) { String tmp = String.valueOf(y); if (tmp.charAt(2) == '1' || tmp.charAt(2) == '3' || tmp.charAt(2) == 5 || tmp.charAt(2)...

Why would the transactions motive and the precautionary motive for holding money both tend to vary directly

Question:

Step by Step Answer:

The higher the price level the more money will be needed to conduct a g...View the full answer

Exploring Economics

Students also viewed these Economics questions