The Amount of Money That People Wish to Hold to Use

question 243

Multiple Choice

The amount of money that people wish to hold to use in transactions varies directly with

• A) their planned near-term purchases.
• B) the money supply.
• C) the income tax rate.
• D) the interest rate.

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Definitions:

Constant Rate

A stable, unchanging rate, often referring to growth rates, interest rates, or other financial metrics that do not fluctuate over a specified period.

Share

A unit of ownership interest in a corporation or financial asset, giving the holder a proportionate claim on the company’s assets and profits.

Annual Dividend

The total dividend payment a company distributes to its shareholders for each share held over the course of a year.

Required Rate

Often referred to as the required rate of return, this is the minimum annual percentage return an investor expects to achieve from an investment.