Explain short and long term interest rate in money demand, Macroeconomics

Assignment Help:

Explain about the short term and long term interest rate in money demand.

The Opportunity Cost of Holding Money Demand:

a. Short-term interest rates

Rates onto assets which come due in less than six-months.

These rates tend to shift together due to basic supply and demand. What is the reason? Investors will shift their money out of any short-term financial asset which offers a lower than average interest rate.

b. Long-term interest rates

Rates onto assets which come due into more than six-months.


Related Discussions:- Explain short and long term interest rate in money demand

Estimating womens labor supply, 1.    Estimating Women's Labor Supply a....

1.    Estimating Women's Labor Supply a.    The following regression was run for an estimate of the current women's labor supply curve: Where h i = hours of labor suppl

Explain the following equation, Which of the following equations is FALSE f...

Which of the following equations is FALSE for perfectly competitive firms? A. Total cost = fixed cost + variable cost B. Marginal cost = change in total cost / change in quantity o

Majority of the citizenry pays, Can democracy survive if a majority of the ...

Can democracy survive if a majority of the citizenry pays little or nothing in taxes while benefiting directly from a higher level of government spending? Why or why not?

Component of balance payments, Component of balance payment: BOP is a ...

Component of balance payment: BOP is a statement  that summarises all the economic transactions between residents (individuals, companies and other organisations) of the home

Liquidity preference theory, Explain clearly the liquidity preference theo...

Explain clearly the liquidity preference theory of interest propounded by j.m.keynes

Lloyd''s of London, what characteristic of Lloyd''s of london business orga...

what characteristic of Lloyd''s of london business organization was responsible for the financial losses suffered by the Names who had invested in Lloyd''s?

What is the meaning of deindustrialisation, What is the meaning of Deindust...

What is the meaning of Deindustrialisation Deindustrialisation or structural decline of many manufacturing industries along with activities like coal mining is associated with

Define nominal wages, Q. Define Nominal wages? The nominal wage is wage...

Q. Define Nominal wages? The nominal wage is wage per unit of time in the currency used in the country- what we usually just call wage. When we mention wage in macroeconomics w

Permanent income, assuming that B=0.33 Y1998=[0.33]Y1998 Estimate the perma...

assuming that B=0.33 Y1998=[0.33]Y1998 Estimate the permanent income for 1998

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd