1classify each of the following as related to the, Ask an Expert

Economics

1.Classify each of the following as related to the transactions demand, precautionary demand, or asset (speculative) demand for money. Explain:

(a) Rodrigo keeps $200 in cash in case of emergency.

(b) Kay moves her funds to a new bank that offers higher interest rates on bank accounts.

2. Why would the money demand curve turn vertical when interest rates are very high and households are holding very small money balances?

3. If equilibrium real GDP is less than full employment real GDP, what should the Fed do

(a) About interest rates?

(b) The reserve requirement?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9528274

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