经济学 Economics QuestionExplain about the relationship between Money Demand (MD) ,Interest Rate(r) and Bond Prices.Does it related to Investment (I)?When r is low,bond prices is high,then what will happen to the MD?and instead.
来源:学生作业帮助网 编辑:作业帮 时间:2024/09/30 18:12:08
经济学 Economics QuestionExplain about the relationship between Money Demand (MD) ,Interest Rate(r) and Bond Prices.Does it related to Investment (I)?When r is low,bond prices is high,then what will happen to the MD?and instead.
经济学 Economics Question
Explain about the relationship between Money Demand (MD) ,Interest Rate(r) and Bond Prices.
Does it related to Investment (I)?
When r is low,bond prices is high,then what will happen to the MD?
and instead.
经济学 Economics QuestionExplain about the relationship between Money Demand (MD) ,Interest Rate(r) and Bond Prices.Does it related to Investment (I)?When r is low,bond prices is high,then what will happen to the MD?and instead.
When demand of money increases,the price of using money increases,so interest rate increases.
As for the relationship between bond price p and interest rate r,we have:100/p=r.so clearly there are inversely related,i.e.one goes up,the other goes down.
When r is high,the price of capital is high,so investment decreases as low-return projects cannot get funding.
Hope this helps!