Econ AL

2007-02-25 9:38 am
1) 1998 Q5a
why under inflation= [fewer monetary asset realte to monetary liability will gain]?
2) 1998 6b
why investment speculative demand for money will decrease as its -ve relate to interest]?
3) what is difference between [fix] and [variable] exchange rate?

thx

回答 (1)

2007-02-26 8:00 am
✔ 最佳答案
1) under inflation, if inflation rate cannot be correctly anticipated, debtor will gain and creditor will lose. this is becasue the real rate of interets will be lower then nominal interest rate. The real value of money that debtor pays is lower, and the real value of money that creditor receieve is lower.
fewer monetary asset relatively to monetray liabilty means he has more monetary liabilities, therefore he gain

2) i do not know the answer, but my teacher said investment speculative demand for money is somehow the same with Ma

3) fixed exhcnage rate system means the government interefrer with the exchaneg rate system, they hold the exchaneg rate at the same level
variable (flextible) echange rate system measn the exchaneg rate is determine in the market, by demand and supply of money currency

the above is not enough for examinations
u better check out from textbooks or past paper questions


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