When the Money Market Is Drawn with the Value of Money

question 180

Multiple Choice

When the money market is drawn with the value of money on the vertical axis,the money demand curve slopes

• A)upward,because at higher prices people want to hold more money.
• B)downward,because at higher prices people want to hold more money.
• C)downward,because at higher price people want to hold less money.
• D)upward,because at higher prices people want to hold less money.

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Definitions:

Present Value

The current value of a future amount of money, calculated using a specific interest rate to account for the time value of money.

Annual Cash Operating Costs

Refers to the total amount of cash expenditures that a business incurs within one year to maintain its operations excluding non-cash expenses.

New Bus

A recently manufactured bus, not previously used or owned, often equipped with the latest features and technology.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.