Chapter26: Monetary Policy
Section: Chapter Questions
Problem 3SQ
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Question
- The speculative
demand for money suggests that:
(a) Individuals hold onto money for the purpose of engaging in transactions
(b) As the rate of interest rate increases, the demand for money will rise
(c) When the economy becomes more uncertain, people are more likely to hold unto money
(d) The velocity of money is constant
(e) As the rate of interest falls, the demand for money will rise.
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