When Nominal Interest Rates on Financial Assets Are Low,the Opportunity

question 142

Multiple Choice

When nominal interest rates on financial assets are low,the opportunity cost of holding money is ________,so the quantity of money demanded by households and firms will be ________.

• A) high; high
• B) high; low
• C) low; high
• D) low; low

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Definitions:

Synergistic Benefits

The advantages or positive outcomes that arise when two or more entities (such as companies or processes) combine or interact, leading to a result that is greater than the sum of their separate effects.

Closely Held Firm

A business entity where a small group of shareholders hold a majority of the ownership and it's not publicly traded.

Stabilize Earnings

Efforts or strategies used by businesses to maintain consistent and predictable profit levels despite market fluctuations.

Federal Outlays

Government spending funded by the federal budget, including spending on defense, education, public works, and social programs.