14. The asset demand for money is unrelated to both the interest rate and the le

Question

14. The asset demand for money is unrelated to both the interest rate and the level of GDP. B) varies inversely with the rate of interest C) varies inversely with the level of real GDP. D) varies directly with the level of nominal GDP A) 15. On a diagram where the interest rate and the quantitv of monev demanded are shown on the vertical and horizontal axes respectively, the total demand for money can be found by: A) horizontally adding the transactions and the asset demand for money B) vertically subtracting the transactions demand from the asset demand for money. C) horizontally subtracting the asset demand from the transactions demand for money D) vertically adding the transactions and the asset demand for money 0 Quantity of money Refer to the above diagram of the money market. Given D. and S. an interest rate sustainable because the: A) supply B) s of ij is not of bonds in the bond market will decline and the interest rate will rise. upply of bonds in the bond market will increase and the interest rate will decline. C) D) demand for bonds in the bond market will decline and the interest rate will rise. demand for bonds in the bond market will rise and the interest rate will fall. Use the following to answer question 17: Answer the next question(s) on the basis of the following informatio xpiration date: bond price S1000; bond fixed annual interest payment-S100; bond a interest rate- 10 percent 17. Refer to the above information. If the price of this bond falls by $200, the interest rate will: A) rise by 2.5 percentage points. B) rise by 5 percentage points C) fall by 2.5 percentage points D) fall by 5 percentage points.

Explanation / Answer

14) The asnwer is B -) varies inversely with the rate of interest.

because the asset demand of money means money is kept store for future use and act as a asset. when the interest rate is low, the asset demand for money is high because the individual found no benefit to invest the money as the interest rate is low and return will be low too , therefore they increase the demand for money and when the interest rate is high, the individual increase investment and thus asset demand for money decrease.

15) please uplaod it again, its againt chegg policy

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