Explain why an increase in U.S. interest rates relative to UK interest rates would affect the U.S.-UK  exchange rate.Suppose

For the Module 4 Assignment, please answer the following questions:

• What is money, and why does anyone want it?
• Explain the concept of the opportunity cost of holding money .
• Explain why an increase in U.S. interest rates relative to UK interest rates would affect the U.S.-UK  exchange rate.
• Suppose that a person’s wealth is $50,000 and that her yearlyincome is $60,000. Also suppose that her money demand functionis given by  Md = $Y10.35 – i2Derive the demand for bonds. Suppose the interest rate increases by 10 percentage points. What is the effect on her demand for bonds?b.  What are the effects of an increase in income on her demand for money and her demand for bonds? Explain in words

Specifications

1. Submit an assignment of minimum 07 pages excluding Title page and References.
2. Cover page should include Introduction of topic, course, name, date,  etc.
3. Support your argument with example and data
4. Include a reference page with your sources.
5. Use APA formatting through out.

You can view more information and examples of sample papers in APA formatting at https://owl.english.purdue.edu/owl/resource/560/01/. (Links to an external site.)