Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you re explain this in super simple terms Interest rates have a big influence on gold prices because of a factor known as opportunity

can you re explain this in super simple terms Interest rates have a big influence on gold prices because of a factor known as "opportunity cost." Opportunity cost is the idea of giving up a near-guaranteed gain in one investment for the potential of a greater gain in another. With interest rates holding near their historic lows, bonds and CDs are, in some cases, yielding nominal returns that are less than the national inflation rate. A falling U.S. dollar tends to push gold prices higher because other currencies and commodities around the world increase in value when the dollar falls. On the contrary, a strengthening U.S. dollar often comes about because of a growing U.S. economy

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Macroeconomics

Authors: N Gregory Mankiw

8th Edition

1305971507, 9781305971509

More Books

Students also viewed these Economics questions

Question

How can the company ensure a high survey response rate?

Answered: 1 week ago