Which one of the following statements regarding the demand for money is correct? (a) A positive relationship exists between the quantity of money demanded and the prevailing interest rate in an economy; (b) The demand for money is made up of the sum of all the money balances that participants in the economy would like to have; (c) For a given interest rate, an increase in nominal income increases the demand for money; (d) Two key factors that impact on the demand for money by individuals are savings and investments available to participants
Which one of the following statements regarding the demand for money is correct? (a) A positive relationship exists between the quantity of money demanded and the prevailing interest rate in an economy; (b) The demand for money is made up of the sum of all the money balances that participants in the economy would like to have; (c) For a given interest rate, an increase in nominal income increases the demand for money; (d) Two key factors that impact on the demand for money by individuals are savings and investments available to participants
Chapter20: Monetary Policy
Section: Chapter Questions
Problem 6SQ
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Question
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Which one of the following statements regarding the |
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(a) |
A positive relationship exists between the quantity of money demanded and the prevailing interest rate in an economy; |
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(b) |
The demand for money is made up of the sum of all the money balances that participants in the economy would like to have; |
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(c) |
For a given interest rate, an increase in nominal income increases the demand for money; |
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(d) |
Two key factors that impact on the demand for money by individuals are savings and investments available to participants. |
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