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How do changes in interest rates affect the money supply?
When the interest rates are high, people would prefer to save than holding money. That means money supply in the economy is decreased. Whereas when the interest rates are low people prefer to hold money and spend, means increased money supply in the economy.
Why people hold money?
Savings provide a cushion for times when we need money for necessities, trips, unexpected bills, job loss, retirement, helping others in their times of need, save a down payment for a home, etc.
Why do people want money so bad?
Cause people need money to buy stuff and t' pay bills so they either rob a bank or steal from another. More prefer to rob a bank and bring a gun. Who walks into a bank with a sword?
Why did many people of the backcountry use a barter system?
People knew and were confident that the items being exchanged would hold/keep their value as time went on. They did not use money because they were not sure that it would hold its value, and thats why the barter system was used by backcountry people.
What would happen to the quantity of money people wish to hold when there is a decrease in the price level?
It would decrease, if there are lower prices, than people would naturally demand less of it. This is the quantity theory of money Money Demand= Price level*Income/Velocity of Money, what is important here is that Price level is in the numerator, so when it decreases the total quantity of money decreases as well.
How do changes in interest rates affect money supply?
When the interest rates are high, people would prefer to save than holding money. That means money supply in the economy is decreased. Whereas when the interest rates are low people prefer to hold money and spend, means increased money supply in the economy.
How do changes in interest rates affect the money supply?
When the interest rates are high, people would prefer to save than holding money. That means money supply in the economy is decreased. Whereas when the interest rates are low people prefer to hold money and spend, means increased money supply in the economy.
Can you hold your breath longer in hot or cold water?
Well, some people prefer cold than hot. Some people prefer hot than cold.
Why do rich people prefer to go to malls?
because they have enough money
Why do people prefer watching television than going out?
A lot of people prefer watching television to going out. This is because watching television is more convenient, and doesn't involve spending a lot of money.
Do people prefer walking or cycling?
Walking - it is free Cycling costs money - to buy the cycle for a start
Why do people worship money?
Many people believe the things they hold dear can only be acquired with money, therefore money is where the're enthusiasm is concentrated. (just my opinion.)
Why are the embankments used to hold back rising seas in the Sundarbans made of clay?
because the people of the Sundarbans prefer to stick to tradition
Why do people hold bonds?
They are an investment. In time they will get their money back, with some profit.
How do people manage their money?
Many people manage their money by drawing up a budget of income and expenditure. Some people prefer to budget on a monthly basis while others would rather manage their finances weekly.
What are three limitations on the money expansion process?
1. Borrowers do something with the money they borrow 2. People do not withdraw cash. 3. Banks do not let reserves sit idle To the extent that people prefer to hold cash, the actual money multiplier will be smaller than the simple money multiplier because cash withdrawals reduce reserves in the banking system. Reduced reserves give banks less ability to make loans or buy bonds.
Why do people prefer real diamonds?
People dont like to look fake so the buy real diamonds.Another AnswerReal diamonds are an investment, more so that a car, for example. In 10 years, a car isn't worth much, but a diamond purchased with the same amount of money will generally hold its value.
