ECON天才請進來... need help..!! [urgent]

⊙蜂蜜熊⊙ · 07-24-2003

studying for my final exam...

kinda puzzled...

1. increase in price --> increase in interest rate... why is dat?!?!..

2. decrease in real money (M/P) --> increase in interest rate... why is dat again??

thanx for da help... greatly appreciated...

⊙蜂蜜熊⊙ · 07-24-2003

figured out the first one...

but still don't understand da second q...-_-

benyaoguai · 07-24-2003

引用:

最初由 ⊙蜂蜜熊⊙ 發表
studying for my final exam...

kinda puzzled...

1. increase in price --> increase in interest rate... why is dat?!?!..

2. decrease in real money (M/P) --> increase in interest rate... why is dat again??

thanx for da help... greatly appreciated...

increase in price.. assuming money supply is constant~
then.. money demand would shift out..
so that in the money model~~
with the increase of Md but constant Ms.... ur interest rate must be higher~~ u can draw it out~~ Ms is just a vertical line~

decrease in real money ? .. is that supply or demand? @.@
if it's real money demand... result should be the same as above
but if it's supply... then..deccrease of which would cause the supply curve to shift in~ and with constant money demand~ of course the interest rate would go up ^^

just draw the diagram lo~~~

matashi · 07-24-2003

smart girl

Itchy · 07-24-2003

引用:

最初由 ⊙蜂蜜熊⊙ 發表
studying for my final exam...

kinda puzzled...

1. increase in price --> increase in interest rate... why is dat?!?!..

2. decrease in real money (M/P) --> increase in interest rate... why is dat again??

thanx for da help... greatly appreciated...

Hmm... never taken economics before so don't take my word for this.

I THINK.. AND I STRESS I THINK...

Increase interest results increase in price. An increase of price level without a corresponding wage increase will reduce the real income of workers. Real income = real money. I am just B.S.ing here. :shurg:

benyaoguai · 07-24-2003

引用:

最初由 Itchy 發表

Hmm... never taken economics before so don't take my word for this.

I THINK.. AND I STRESS I THINK...

Increase interest results increase in price. An increase of price level without a corresponding wage increase will reduce the real income of workers. Real income = real money. I am just B.S.ing here. :shurg:

dude =.= u answered nothing~~

though.. this part is correct

An increase of price level without a corresponding wage increase will reduce the real income of workers.

Itchy · 07-24-2003

引用:

最初由 benyaoguai 發表

dude =.= u answered nothing~~

though.. this part is correct

An increase of price level without a corresponding wage increase will reduce the real income of workers.

haha... i am a noob.

So what's a real answer.