In the Baumol-Tobin view, a decrease in interest rates will cause individuals to hold

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According to the Baumol-Tobin model, individuals balance the cost of holding money (in the form of foregone interest) with the transaction costs of converting other assets into money when needed. Therefore, a decrease in interest rates lowers the opportunity cost of holding money, causing individuals to choose to hold larger money balances. This in turn reduces the velocity of money as people are using money less frequently for transactions.

In the Baumol-Tobin View, a Decrease in Interest Rates Will