--%>
Assignment Help - homework help

Unsustainable previous interest rate

Employ you knowledge about equilibrium prices to describe why the previous interest rate is no longer sustainable.

E

Expert

Verified

Along with an enhancement in total money demand, the previous interest rate (i0) is unsustainable since along with the new demand for money (Dm1), the quantity of money demanded will surpass the quantity of money supplied.  There would be lack of funds & upward pressure onto the interest rate.

   Related Questions in Finance Basics

  • Q : Define Revolving Fund Revolving Fund :

    Revolving Fund: Usually refers to a cash account termed as an office revolving fund (ORF). This is not a fund however an advance from an appropriation. The agencies might use the cash advance to pay out ORF checks for instant requirements, as specifie

    		•
  • Q : Shapes of marginal-cost and the

    Normal 0 false false

    		•
  • Q : What is Expenditure Authority

    Expenditure Authority: The authorization to make expenditure (generally by a budget act appropriation, provisional language or some other legislation).

    		•
  • Q : Causes and solution to international

    causes and solutions to international bank crisis

    		•
  • Q : Explain Object of Expenditure Object of

    Object of Expenditure (Objects): It is a categorization of expenditures based on the kind of goods or services received. For illustration, the budget group of Personal Services comprises the objects of Salaries and Wages and Staff Benefits.

  • Q : Healthcare Finance Issues Question 1 A.

    Question 1 A. What per visit price must be set for the service to break even? To earn an annual profit of $100,000? (10,000 * 5.00 - $500,000 - 50,000 = 0

    Q : Domestic supply and demand diagram

    Normal 0 false false

    		•
  • Q : Health finance 7.2 The audiology

    7.2 The audiology department at Randall Clinic offers many services to the clinic's patients. The three most common, along with cost and utilization data, are as follows: Service Variable Cost Annual Direct Annual # Visits per Service Fixed Costs Basic exam $5 $50,000 3,000 Advanced examination $7 $

    		•
  • Q : Capital investment appraisal methods

    The capital investment appraisal methods like NPV, IRR, ARR, PV and Time value of money have become irrelevant post Celtic Tiger. Due to the depth of the recession companies do not have budgets to invest. Explain? At first use this

    		•
  • Q : How is finance associated to accounting

    How is finance associated to the disciplines of accounting and economics? Financial management is basically a combination of accounting and economics. Firstly, financial managers employ accounting information such

    		•