The demand for money is determined by
A) the behaviour of the government.
B) the behaviour of the chartered banks.
C) the behaviour of the Bank of Canada.
D) the behaviour of the consumer and the firm.
E) the behaviour of the private sector.

Question

Quizplus · Accepted Answer

The demand for money is primarily determined by the behaviour of consumers and firms. The amount of money people and businesses want to hold depends on factors such as their income, the interest rate, and the level of economic activity. While the government, chartered banks, and the Bank of Canada may have some influence on the demand for money, it is ultimately driven by private sector behaviour.

The Demand for Money Is Determined by