This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Inflation reduces the velocity of money because people reduce their money holdings. Is the previous ... (Read 115 times)

jhjkgdfhk

  • Hero Member
  • *****
  • Posts: 569
on: Jun 29, 2018
Inflation reduces the velocity of money because people reduce their money holdings. Is the previous statement correct or incorrect? Explain your answer.
 
  What will be an ideal response?

Question 2

The opportunity cost of the financial resources used to finance the purchase of capital is
 
  A) the price of the capital goods purchased.
  B) the real interest rate.
  C) the quantity of investment demanded.
  D) the supply of investment.
  E) capital investment.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

peter

  • Sr. Member
  • ****
  • Posts: 330
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. As the inflation rate rises, people reduce their money holdings by spending money more rapidly. As a result, the velocity rises rather than falls.

Answer to Question 2

B


jhjkgdfhk

  • Member
  • Posts: 569
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

raenoj

  • Member
  • Posts: 340
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Excessive alcohol use costs the country approximately $235 billion every year.

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Observable Universe Before and After Inflation Observable Universe Before and After Inflation
Wall painting with giraffes, zebra, eland, and abstract shapes, San people, Inanke Cave, Matobo ... Wall painting with giraffes, zebra, eland, and abstract shapes, San people, Inanke Cave, Matobo ...
Democracy (or “democratization”) is a global social movement. People all over the world yearn ... Democracy (or “democratization”) is a global social movement. People all over the world yearn ...
The social movement that centers on the environment has become global. In all nations, people are ... The social movement that centers on the environment has become global. In all nations, people are ...
If a meteor (148 kg) is moving with a velocity of 112 m/s , and breaks into two parts, where ... If a meteor (148 kg) is moving with a velocity of 112 m/s , and breaks into two parts, where ...
A debt payment of $7500 is due in 24 months. If money is worth 7.2% p.a. compounded quarterly, ... A debt payment of $7500 is due in 24 months. If money is worth 7.2% p.a. compounded quarterly, ...
Video: Lipid absorption - end products & transport mechanism

For a complete list of videos, visit our video library