In the Baumol-Tobin view of the transactions demand for money,
A) economic agents do not adjust their money holdings in the face of interest rate fluctuations.
B) economic agents trade off the benefits of holding money against the cost of interest foregone from holding bonds.
C) the quantity of money demanded will rise only if the interest rate rises.
D) the quantity of money demanded will rise only if the interest rate falls.
Correct Answer:
Verified
Q50: The economist who has expanded the Baumol-Tobin
Q51: The interest rate is a measure of
A)the
Q52: The tendency of individuals to hold money
Q53: The liquidity preference theory emphasizes
A)the transactions motive
Q54: The quantity theory of money
A)included the interest
Q56: According to Baumol and Tobin, the transactions
Q57: People's decision to hold money based on
Q58: Which of the following is true?
A)The demand
Q59: Money's convenience yield is
A)the nominal interest rate
Q60: In the Baumol-Tobin view, an increase in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents