Question

liquidity, solvency solvency, liquidity bank run, speculation speculation, bank run nvestment demand is negatively related to  ...

liquidity, solvency

solvency, liquidity

bank run, speculation

speculation, bank run

nvestment demand is negatively related to      and positively related to   .

business expectations, the interest rate

the interest rate, bullish expectations

the interest rate, bearish expectations

income, expectations
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Investment demand is negatively related to interest rates since at higher interest rates it is costly to borrow funds for investment. Similary, when the interest rates are lower it is cheaper to borrow funds for investment.

Investment demand is positively related to bullish expectations. A bullish sentiment refers to an optimistic market where prices of securities and sectors are expected to rise.

Thus the correct answer is: b. The interest rate, bullish expectations.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How is the idea of a liquidity trap related to the interest elasticity of money demand?...
How is the idea of a liquidity trap related to the interest elasticity of money demand? Under what economic circumstances would a liquidity trap likely occur?
Money demand correlates with the following variable as follows: negatively correlated with interest rate positively correlated...
Money demand correlates with the following variable as follows: negatively correlated with interest rate positively correlated with the aggregate price level negatively correlated with the real aggregate spending answers (a, b, c) are correct answers (a,b) are correct
Assume that the current demand for goods does depend on expectations. A monetary expansion in the...
Assume that the current demand for goods does depend on expectations. A monetary expansion in the current period will cause a rightward shift in the IS curve if: 1 Current and expected future real interest rates are positively related 2 Current and expected future real interest rates are negatively related 3 Current and expected future real interest rates are unrelated 4 Monetary policy cannot affect, directly or indirectly, the position of the IS curve in the current period
Liquidity Ratios: - Working Capital: $234,379 - Current Ratio: 1.34 - Inventory Turnover: 13.88 times Solvency...
Liquidity Ratios: - Working Capital: $234,379 - Current Ratio: 1.34 - Inventory Turnover: 13.88 times Solvency Ratios: - Debt to Asset Ratio: 75% - Times Interest Earned: 2656 Profitability Ratios: - Gross Profit Rate: 50% - Profit Margin: 17.7% What accounting recommendations do you have for the new company? What business recommendations do you have to help the new company?
Suppose a known reliable borrower approaches a commercial bank with a randomly occurring liquidity crisis that...
Suppose a known reliable borrower approaches a commercial bank with a randomly occurring liquidity crisis that necessitates an extension of its bank line of credit. The bank then offers terms for the loan renewal: an interest rate, a principal amount, collateral requirements, and a loan term. After the borrower accepts the terms, a random process intervenes to present several uncertain business opportunities to the borrower. While the bank expects the borrower to exercise great care and good business judgment, the...
Suppose the demand for real money balances is Md/P = L(Y, i), where L(Y, i) is...
Suppose the demand for real money balances is Md/P = L(Y, i), where L(Y, i) is an increasing function of income Y and a decreasing function of the nominal inter- est rate i. Assume that the interest elasticity of money demand is infinite when the nominal interest rate is zero. Money-market equilibrium is represented by the equation Ms/P = L(Y, i), where Ms is the money supply controlled by the central bank and P is the price level. The LM...
Answer the next question based on the following list of factors that are related to the...
Answer the next question based on the following list of factors that are related to the aggregate demand curve. 1) Real-Balances Effect 2) Household Expectations 3) Interest-Rate Effect 4) Personal Income Tax Rates 5) Profit Expectations 6) National Income Abroad 7) Government Spending 8) Foreign Purchases Effect 9) Exchange Rates 10) Degree of Excess Capacity Changes in which two of the factors would most likely cause a shift in aggregate demand due to a change in consumer spending? 1&3? 2&4?...
22. Over what period of time is the liquidity-preference theory most relevant, and what does it...
22. Over what period of time is the liquidity-preference theory most relevant, and what does it suppose? a. short run; it supposes that the price level adjusts to bring money supply and money demand into balance b. short run; it supposes that the interest rate adjusts to bring money supply and money demand into balance c. long run; it supposes that the price level adjusts to bring money supply and money demand into balance d. long run; it supposes that...
8) If the deficit is financed by selling bonds to the ________, the money supply will...
8) If the deficit is financed by selling bonds to the ________, the money supply will ________, increasing aggregate demand, and leading to a rise in the price level. A) public; rise B) public; fall C) central bank; rise D) central bank; fall 9) Keynes's theory of the demand for money implies that velocity is A) not constant but fluctuates with movements in interest rates. B) not constant but fluctuates with movements in the price level. C) not constant but...
1. Suppose that we are at a long-run equilibrium and suddenly aggregate demand rises. In the...
1. Suppose that we are at a long-run equilibrium and suddenly aggregate demand rises. In the short run this will: a. increase prices. b. increase output. c. increase real wages. d. All of the above. e. Both A and B are correct. 2. The AS/AD model is unable to show a situation in which we have _____ and _____ at the same time. a. inflation;   growth b. deflation;   growth c. inflation;   depression d. deflation;   depression e. inflation; deflation. 3. A...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT