Question

Joan has the following assets and liabilities: Credit card balance$1,000 Cash$200 Government bonds$3,000 Checking$300 Car loan balance$10,000 Car$15,000 What is Joan's money demand

Answer 1

$500

Step-by-step explanation:

Money demand can be described as the part of an assets in which an individual is ready to hold as cash, this cash can be used to purchase goods and services.

In the scenario described above, Joan's money demand is

= Cash balance+Checking account balance

Cash balance = $200

Checking account balance = $300

Money demand= $200+$300

= $500

Hence Joan's money demand is $500