Learning Objectives 1. Explain the Motives for Holding Money and Relate Them to the Interest Rate That Could Be Earned from Holding Alternative Assets, Such as Bonds. 2. Draw a Money Demand Curve and Explain How Changes

1. Describe a real or made up but realistic situation that could cause you or someone you know to have to use money from a financial reserve. (3-6 sentences. 2.0 points): having to get a car. Another situation could be house repairs.

* From the scenario for Katrina’s Candies, examine the key factors affecting the demand for and the supply of a good in general and Katrina’s Candies specifically. Distinguish between a change in demand and a change in the quantity demanded (movement along the demand curve).

Describe three macroeconomic variables in the United States that impact the supply and demand of your chosen product or service.

Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video tutorials as a tool to help you answer questions about the changes in price and quantity

The four fundamental factors that affect the supply of and demand for investment capital, and hence interest rates, are productive opportunities, time preferences for consumption, risk, and inflation. Explain how each of these factors affects the cost of money. In your discussion, explain why a hospital 's bond rating is important and describe the different levels. (You can use any bond rating agency for analysis).

d) What two assumptions are included in calculating the maximum change in the money supply

Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video tutorials as a tool to help you answer questions about the changes in price and quantity

a) Draw and properly label the demand and supply graphs (this means you must label the axes and any lines you include on the graph).

a.) Draw and properly label the demand and supply graphs (this means you must label the axes and any lines you include on the graph).

In spite of the fact that a few individuals are hesitant to touch their reserve funds, there is some rationale to trading in for spendable dough bank accounts with low rates of return so as to pay off obligation gathering high rates of interest. By and large, the rate of interest being accumulated on loans far out paces the rate at which the bank account develops notwithstanding when considering new deposits being added to the investment account. Borrowers may have the capacity to determine their troubles with the loan specialist and pay off obligation before installment histories begin to have a genuine negative impact on their credit

As a significant proportion of household consumption is based on borrowing and if the cash rate falls, the amount households can borrow will increase

A: Investment spending depends on interest rates due to opportunity cost and risk. For example, when interest rates rise, the opportunity cost of your investment also increases. When interest rates are higher investors are willing to pay less for payment in the future. Which in turn leads to a lower rate of investment. The opposite can be said for falls in interest rates that are met will lower opportunity costs.

Figure 2 demonstrate how any change in one of the other determinants causes demand to rise or to fall by shifting the whole curve to the right or the left. Other factors that determinates of demand

In Friedman’s monetarist construct of money has two side that is highly active. One of the side is money is being the cause of all failures and asymmetries in the economy (in the short term). The other side is neutral which money is influencing only the price level (in the long term). The nominal quantity of money is determined by its supply. On the other hand, the real volume of the money stock is expressed in the amount of goods and services that can be acquired for a given nominal amount of money and is conditioned by the demand for money, which is directly related to the price level.

Using appropriate diagrams, discuss how an increase or an improvement in the following non-price determinants of supply would change equilibrium prices and quantities.