Question: Q1: Using the liquidity preference model in the powerpoints, why does inflation result in the interest rate increasing?? marl M Inbo Uplo E Abo Mus

Q1: Using the liquidity preference model in the powerpoints, why does inflation result in the interest rate increasing?? marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree ZIP ( http f Aud| Alex * Alex | Ads @ Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. r Connect-Biol 1107 @ D2L | MATH MindTap - Cengage. #4 child support B Rick Barker's Music... Digital Resources f... Quesitons for Discu. BONDS X Bonds can

Q1: Using the liquidity preference model in the powerpoints, why does inflation result in the interest rate increasing??

be brought and sold $1000 5 year bond at 5% You pay

$1,000 and get $50 interest payment each year for 5 years. End

of 5th year you get your $1,000 back. Should someone buy your

bond at end of year 2 for $800 effective interest rate is

6.25% Should someone buy your bond at end of year 2 for

$1,200, effective interest rate is 4.16% - + 1 15 1 0

>> Reflect in ePortfolio Download Open with docReader > Activity Details 9

M + 3:55marl M Inbo Uplo E Abo Mus d App| |

marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree ZIP ( http f Aud| Alex * Alex | Ads @ Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. r Connect-Biol 1107 @ D2L | MATH MindTap - Cengage. #4 child support B Rick Barker's Music... Digital Resources f... Quesitons for Discu. BONDS X Bonds can be brought and sold $1000 5 year bond at 5% You pay $1,000 and get $50 interest payment each year for 5 years. End of 5th year you get your $1,000 back. Should someone buy your bond at end of year 2 for $800 effective interest rate is 6.25% Should someone buy your bond at end of year 2 for $1,200, effective interest rate is 4.16% - + 1 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree ZIP ( http f Aud| Alex * Alex | Ads | Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. r Connect-Biol 1107 : D2L | MATH MindTap - Cengage. He child support Rick Barker's Music.. Digital Resources f... Quesitons for Discu. BONDS Bonds can be brought and sold $1000 5 year bond at 5% Should someone buy your bond at end of year 2 for $800 effective interest rate is 6.25% . Bond price decreases, Interest rate rises Should someone buy your bond at end of year 2 for $1,200, effective interest rate is 4.16% . Bond price increases, interest rate decreases - + t 2 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree ZIP ( http f Aud| Alex * Alex | Ads | Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci. r Connect-Biol 1107 D2L ] MATH MindTap - Cengage. Hsi child support Rick Barker's Music.. Digital Resources f... Quesitons for Discu. Liquidity Preference Model People hold two assets: Money and Bonds Money is the most liquid asset mainly used for transactions Bonds are loans to companies or governments that provide interest LA - + t 2 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree ZIP ( http f Aud| Alex * Alex | Ads | Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. r Connect-Biol 1107 : D2L ) MATH 2 MindTap - Cengage. #s child support . Rick Barker's Music.. Digital Resources f... Quesitons for Discu. Liquidity Preference Model People hold two assets: Money and Bonds Money is most preferred as it is the most liquid Interest is the reward for parting with money 5 - + t 3 15 1 0>> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree| ZIP ( http f Aud| Alex * Alex | Ads @ Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. r Connect-Biol 1107 : D2L ) MATH MindTap - Cengage.. Hsi child support Rick Barker's Music.. Digital Resources f... Quesitons for Discu. Increases in Money Demand * Increase in Price Level (Inflation) will require more money in order to conduct transactions for same basket of goods. * People sell bonds to raise cash * Increase supply in bonds for sale lowers prices of bonds. . Lower prices of bond increases effective interest rates * Increase in demand for money increases price of money - higher Interest rates - + 3 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree ZIP ( http f Aud| Alex * Alex | Ads | Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci. ar Connect-Biol 1107 : D2L | MATH MindTap - Cengage.. #& child support B Rick Barker's Music... Digital Resources f... Quesitons for Discu. Increases in Money Demand * Increase in Price Level (Inflation) will require more money in order to conduct transactions for same basket of goods. * People sell bonds to raise cash * Increase supply in bonds for sale lowers prices of bonds. Lower prices of bond increases effective interest rates * Increase in demand for money increases price of money - higher Interest rates - + t 3 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App Con Con 9 Gree ZIP ( http f Aud Alex * Alex | Ads | Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. . Connect-Biol 1107 : D2L | MATH MindTap - Cengage. #& child support B Rick Barker's Music... Digital Resources f... Quesitons for Discu. Decreases in Money Demand * Decrease in Price Level (deflation) will require less money in order to conduct transactions for same basket of goods. * People reduce cash holdings and buy bonds * Increase demand for bonds raises prices of bonds. . Higher prices for bonds decrease effective interest rates * Decrease in demand for money decrease the price of money - Lower Interest rates - + t 4 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App Con Con 9 Gree ZIP ( http f Aud Alex * Alex | Ads | Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci... r Connect-Biol 1107 A D2L ] MATH MindTap - Cengage. H& child support B Rick Barker's Music.. Digital Resources f... Quesitons for Discu. Liquidity Preference Model Demand for $ Interest Rates Increase - + 4 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:55marl M Inbo Uplo E Abo Mus d App| | Con Con 9 Gree| ZIP( http f Aud| Alex * Alex | Ads @ Mail AL X W Mon + X rctc.learn.minnstate.edu/d21/le/content/5255667/viewContent/48411565/View Email-school = Introduction to Soci.. . Connect-Biol 1107 : D2L ) MATH MindTap - Cengage. H& child support B Rick Barker's Music.. Digital Resources f... Quesitons for Discu. Liquidity Preference Model LA Demand for Bonds bos Interest Rates Fall 9 - + t 5 15 1 0 >> Reflect in ePortfolio Download Open with docReader > Activity Details 9 M + 3:56

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