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What link do we seek to understand between goods & money markets?

A) The link between inflation and economic growth
B) The link between government spending and investment
C) The link between the demand for goods and the demand for money
D) The link between interest rates and inflation

User Mali
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Final answer:

The link we seek to understand between goods and money markets is the link between the demand for goods and the demand for money. When the demand for goods increases, the demand for money also tends to increase as consumers need more money to make those purchases.

Step-by-step explanation:

The link that we seek to understand between goods and money markets is the link between the demand for goods and the demand for money (Option C). In economics, the demand for goods refers to the quantity of goods that consumers are willing and able to buy at a given price, while the demand for money refers to the desire by individuals and businesses to hold money for transactions and as a store of value.

The demand for goods and the demand for money are linked because when the demand for goods increases, individuals and businesses often need to hold more money to make those purchases. On the other hand, when the demand for goods decreases, individuals and businesses may no longer need as much money.

For example, let's say there is an increase in consumer spending on goods and services. This increase in demand for goods leads to an increase in the demand for money, as consumers need more money to make those purchases. As a result, consumers may withdraw more money from their bank accounts, increasing the demand for money in the economy.

User Agfc
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