Answer the Questions Below

question 71

Essay

Answer the questions below:
(A) Esgalan how each of the fallowng waula affect the money demand functian:
1. An increase in the cast of lving
2. Financial innovations that make it possible to write checks against saving and maney market accounts
3. Financial innovations that make it possible to electunically pay bills aut of 5aping and money market accaunts
4. The December holiday seasan
(B) If the Fed maintans constant growth of the money supply, what happens to interest rates as the maney demand function moves araund?
(C) Given that the maney demand function tends to move araund is it better policy to maintan canstant prowth of the money supply or a constant level af interest rates?

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Definitions:

Gross Domestic Product

The total value of all goods and services produced within a country's borders over a specific time period, used as a measure of economic performance.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to international trade and economic globalization.

Intangibility

Intangibility refers to the characteristic of services that cannot be seen, touched, or physically measured, making them difficult to evaluate before purchase.

Spa Amenities

Features and services provided by a spa, such as massages, facials, and body treatments, aimed at enhancing the guest's relaxation and well-being.