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

Interest rates, Interest Rates (R) - I feel that it is important to include...

Interest Rates (R) - I feel that it is important to include a variable which represents the monetary sector of the economy because those inflationary pressures which are expected t

Marginal abatement cost curve, A critically important criterion that must b...

A critically important criterion that must be considered in evaluating environmental policies is whether they provide strong incentives for people to find new ways to improve ambie

National income statistics, briefly explain any five uses of national incom...

briefly explain any five uses of national income statistics

Adf test, Table Summary of results from the ADF test ...

Table Summary of results from the ADF test Test Number Oil GDP Interest rate Inflation Unemployment Exc

Trends of trade shares, Trends of Trade Shares: India's share in total...

Trends of Trade Shares: India's share in total world exports in 1950 was 1.85 percent and the share in total world imports was 1.7 1 percent. The share of both exports and imp

Result of an export subsidy, Which of the following is a result of an expor...

Which of the following is a result of an export subsidy? a. The imposing nation always benefits from an export subsidy. b. The imposing nation suffers a terms of trade loss from an

Chained dollar method and real gdp, how do I calculate the chained dollar m...

how do I calculate the chained dollar method for real gdp

Aggregate supply and the as curve, Aggregate supply and the AS curve ...

Aggregate supply and the AS curve The AS curve is the aggregate supply as a function of P. It is horizontal when thesupply is low and upward sloping when the s

National income, Y= C+I+G C= 100,000000+ 0.4yd I= 400,00000 T= 0.2+60m G= ...

Y= C+I+G C= 100,000000+ 0.4yd I= 400,00000 T= 0.2+60m G= 750, 000000 Calculate equilibrium level of income

Intergroup conflict and intergroup competition, Discuss whether intergroup ...

Discuss whether intergroup conflict and intergroup competition are the same or different. Provide examples to support your position. What strategies can a leader use to ensure that

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