Thespeculative demand for moneya. will always increase proportionally to theprecautionary demand for moneyb. is affected by changes in equity yieldsbut not by interest rate changes on bankdepositsc. can clearly be separated from moneydemand for transaction since the latter isnot affected by interest rate changesd. is almost always close to zero since assetholders try to avoid holding moneye. none of the above

There are three types of demand for money 1. Transaction demand 2. Precautionary demand 3.…

The speculative demand for money a. will always increase proportionally to the precautionary demand for money b. is affected by changes in equity yields but not by interest rate changes on bank deposits

The speculative demand for money a. will always increase proportionally to the precautionary demand for money b. is affected by changes in equity yields but not by interest rate changes on bank deposits

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 4.8P

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Question

The
speculative demand for money
a. will always increase proportionally to the
precautionary demand for money
b. is affected by changes in equity yields
but not by interest rate changes on bank
deposits
c. can clearly be separated from money
demand for transaction since the latter is
not affected by interest rate changes
d. is almost always close to zero since asset
holders try to avoid holding money
e. none of the above

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