One of the features of money is its store of value. However, most people do not hold their wealth as currency. Given that currency is the most liquid type of asset, why don't people hold all their wealth as currency?
Currency is not a perfect store of value. When prices increase, that is, during periods of inflation, the value of currency falls. Additionally, currency does not earn interest which means there is an opportunity cost of holding currency. For these two reasons, few people hold all their wealth as currency.
Economics
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When the AE line lies above the 45° line,
A) real GDP exceeds aggregate planned expenditure. B) there are unplanned increases in inventories. C) aggregate planned expenditure is less than real GDP. D) the price level is rising. E) there are unplanned decreases in inventories.
Economics
The economy is fully employed when there is no:
a. seasonal unemployment. b. frictional unemployment. c. structural unemployment. d. cyclical unemployment.
Economics