Homework #5 - Robert Garza ECON 3131 Homework #5...

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Robert Garza ECON 3131 Homework #5 Transactions demand for money – The desire to hold money that derives from the desire to make transactions. The desire to hold currency and transactions deposits to use as media of exchange in planned transactions. Portfolio demand for money – Individuals must decide on a part of wealth to hold as money relative to wealth held as interest. The desire to hold money as part of a strategy of balancing the expected rate of return on money with rates of return on other assets. Price level – It’s a numerical value that reflects the average level of prices in an economy. Real money balances - The purchasing power of the quantity of money in circulation, measured as the nominal quantity of money divided by an index measure of the prices of goods and services. The purchasing power of a given quantity of money. Nominal interest rate – A quoted interest rate on a bond, loan, etc. Real interest rate
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Homework #5 - Robert Garza ECON 3131 Homework #5...

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