Econ question
Nominal cost of holding money is the nominal interest rate (which is the return from bonds)
thus, they are negatively related
but if the nominal interest rate (which is the cost of holding money) increased
the discounted value of the stream of income from bonds will decrease
so there is a decrease in bond price and more people are decided to hold money instead of bonds
there is a positive relationship
is it contradictory? any explanation? urgent! please help
[ 本文被sheepsheephin在2007-04-15 16:00重新編輯 ]