Economics

1404 words, 6 pages

Intro Sample...


The higher the interest rate, the smaller the amount of money demanded as an asset.
On a graph measuring the interest rate vertically and the amount of money demanded horizontally, the two demands for the money curves can be summed horizontally to get the total demand for money. This total demand shows the total amount of money demanded at each interest rate. The equilibrium interest rate is determined at the intersection of the total demand for money curve and the supply of money curve.
a) Expanded use of credit cards: transaction demand for money declines; total demand for money declines; interest rate falls. (b) Shortening of worker pay periods: transaction demand for money declines; total demand for money declines; interest rate falls. (c) Increase in nominal GDP: transaction demand for money increases; total demand for money increases; interest rate rises.

8.)
(a) The equilibrium interest rate is 4% where the quantity of money supplied is equal to the total quantity demanded.
(b) At the equilibrium interest rate the quantity of money supplied is 200 and the asset demand for money is 50, the transactions demand for money is 150 and the total quantity of money demanded is 200.
9.) Bond Price ($) Interest Rate (%)
8,000 10.0
9,000 8.9
10,000 8.0
11,000 7.3
13,000 6.2

Bond price and interest rate are inversely related.
10.)
Assuming there is no initial change in GDP, there will be no change in the transactions demand for money. Therefore, the entire increase in the money supply will initially go toward the purchase of financial assets that people prefer to the holding of noninterest-bearing cash. Assuming that these purchases are entirely for bonds (some undoubtedly will be, anyway), the increased demand for bonds will drive their price up and the rate of return on them down; that is, the interest rate in the market will drop.
The lower interest rate wi View More »

Read More

Related Essays on Economics

  • Buddhist Economics: Dethroning Capitalism

    5028 words, 21 pages

    EALC120 Buddhist Studies C120 Introduction Economics are principles that surround the entire world. They are principles that people in all industries, fields, and income levels are effected by. They play an important role in how many individuals live and how different countries’ governments operate. Mainstream economics in its entirety is now seen as something very controversial because of the widespread environmental devastation and socioeconomic disparity globally. Many argue that mainstream economics are a tool of the wealthy and the politically powerful, and that

    View Document »

    Milton Freidman

    464 words, 2 pages

    Milton Freidman was born in 1912 in Brooklyn, New York. Freidman was the youngest of four children and even though his parents worked, the income was very little. However, there was always food on the table and the family atmosphere was very supportive. Freidman attended public schools along with his sisters and in 1928 he graduated from high school at the age of sixteen. His father died during his senior year of high school. Friedman wanted to attended college even though it meant he would have to pay for it by himself. Luckily for Friedman, he was awarded a scholarship from Rutgers Un

    View Document »

    Economic Analysis Of Wesfarmers Coal

    2433 words, 10 pages

    1. Introduction The Wesfarmers Coal division, with mining interests throughout Australia, is part of Wesfarmers Limited, a major diversified Australian public company. They only produce thermal (steam) coal and metallurgical (coking) coal, with the latter being exported (Figure A). As shown in Figure B coking coal is priced much higher than thermal coal. The firm’s coal interests include the Curragh mine in Queensland’s Bowen Basin, the Premier Coal mine at Collie in Western Australia’s south west, and a 40 per cent interest in the Bengalla mine in the Hunter Valley of New South Wales.

    View Document »

    Us Monetary Policy

    1569 words, 7 pages

    Running head: Monetary Policy: Monetary Policy Monetary Policy Introduction The objective of this paper is to study the monetary policy and its impact on the economy. Monetary policy is the process by which the Federal Reserve Bank manages the supply of money in order to influence the economy. By regulating the supply of money, the Federal Reserve Bank controls inflation and price-stability, unemployment, and economic growth. The paper also provides some insight into the creation of money. Details The U.S. is the world’s largest economy, and such its monetary policy

    View Document »

    Fedex Strategy Content Context And Process

    4988 words, 20 pages

    1. INTRODUCTION FedEx Corporation is a leading logistics services company, based in the United States. The previous names were Federal Express, Federal Express Corporation, and FDX Corporation. FedEx was found in 1971 by Frederick W. Smith in Little Rock, Arkansas (http://en.wikipedia.org/wiki/Fedex). The company officially began operations on April 17, 1973, with the launch of 14 small aircraft from Memphis International Airport. On that night, FedEx delivered 186 packages to 25 U.S. cities from Rochester, New York, to Miami, Florida. The FedEx headquarters then move to Memphis, Tennes

    View Document »

    Psychology, Lottery Marketing, And Regulation

    3453 words, 14 pages

    Marketing is, fundamentally, an effort to change the way a person feels about a product and engender a desire to change one’s purchasing patterns. Commercials play on our psychological desire to be “cool,” to fit in, or to feel good about ourselves. Anyone who has seen the Malboro Man straddling a horse and smoking a cigarette, or a bunch of attractive men and scantily clad women frolicking in the mountains drinking beer, can understand the popular association of coolness and fun with these activities. That is, until you recall the image of your friend vomiting at a party or constantly r

    View Document »

    The Influence Of Homework On Primary And Secondary School Students

    1916 words, 8 pages

    The Influence of Homework on Primary and Secondary school students As population grows, the world is getting a lot more competitive than few years ago. Chiefly the students who are accepting basic education are all making great effort to achieve academic success. In the process of working hard to get to their aims, homework is always the steps lead them there. To a great extent, school assignments have not only greatly influenced elementary and high school students’ educational improvements, but also their health conditions. Firstly, assignments after school have brought primary school stud

    View Document »

    Xyz Pharma

    2640 words, 11 pages

    Running head: XYZ PHARMECEUTICALS BUSINESS PROBLEM Business Problem: XYZ Pharmaceuticals University of Phoenix Introduction Good research has quantifiable metrics that can be used to prove a given theory or point. Good research practices are also necessary if one is to provide credible and professional work. This is why good research skills are so important and why XYZ Pharmaceuticals in Atlanta, Georgia needs to account for the following when determining research sources: 1) Independent research-also known as third party research that should be an objective study with no hid

    View Document »

    Carrefour- A Comparison Of The Behaviour Of Carrefour In- And Outside China In Terms Of Csr

    9540 words, 39 pages

    Carrefour- a Comparison of the behaviour of Carrefour in and outside China in terms of CSR - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Table of contents - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Executive summary I. Chapter – Introduction 1. Purpose of the Study 2. Objective of the study 3. The setup of the study II. Chapter – Carrefour’s position in China 2.1 Chinas retail market at a glance 2.2 Carrefour’s role in China III. Chapter – The purpose of CSR for multinational compa

    View Document »

    Novel

    2082 words, 9 pages

    [Author’s Name] [Instructor’s Name] [Course Title] Date Georges Bataille George Bataille is a French librarian and writer whose essays, novels, and poetry expressed his fascination with eroticism, mysticism, and the irrational. He viewed excess as a way to gain personal sovereignty. After training as an archivist at the school of paleography known as the Ecole des Chartes (School of Charters) in Paris, he worked as a librarian and medieval specialist at the Bibliotheque National in Paris until 1942. In 1951 he became keeper of the Orleans library. He also edited scholarly journals an

    View Document »

More Popular Essays

Research help is just moments away!