Classify each statement as either true or false.
a. if two short-term assets offer diff...
Classify each statement as either true or false.
a. if two short-term assets offer different interest rates, then investors will move their wealth towards the asset with the lower return.
b. there is no practical difference between long-term interest rates and short-term interest rates.
c. money demand is affected by short-term interest rates and not long-term interest rates.
d. interest rates on financial assets that mature in ten months or less are long-term interest rates.
e. the opportunity cost of holding money falls when short-term interest rates fall.
Answers: 1
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