Asked by
Salvador Salazar Cook
on Nov 11, 2024
Verified
In the money market,if the money supply decreases,the opportunity cost of holding money:
A) decreases and the quantity of money demanded increases.
B) decreases and the quantity of money demanded falls.
C) increases and the quantity of money demanded falls.
D) increases but the quantity of money demanded remains unchanged.
E) increases and the quantity of money demanded also increases.
Opportunity Cost
The cost of forgoing the next best alternative when making a decision or selection among multiple options.
Money Supply
The total amount of monetary assets available in an economy at a specific time, including cash, bank deposits, and liquid assets.
Money Market
A sector of the financial market where short-term financial instruments with high liquidity are traded.
- Explain the impact of interest rate fluctuations on the inclination to retain cash as opposed to investing in alternative assets.
- Pinpoint the factors responsible for altering the demand and supply rates of money in the economic landscape.
Verified Answer
EK
Learning Objectives
- Explain the impact of interest rate fluctuations on the inclination to retain cash as opposed to investing in alternative assets.
- Pinpoint the factors responsible for altering the demand and supply rates of money in the economic landscape.