Columns (1) and (2) indicate the transactions demand (D_t) for money and columns (1) and (3) show the asset demand (D_a) for money: Refer to the above information.These data suggest that the amount of money demanded for transactions purposes: A)varies directly with the interest rate. B)varies inversely with the interest rate. C)varies inversely with the GDP. D)is independent of the interest rate.

Question

Quizplus · Accepted Answer

The transactions demand for money is primarily determined by the level of GDP and is generally independent of the interest rate.

Columns (1) and (2) Indicate the Transactions Demand (Dt) for Money

Columns (1) and (2) Indicate the Transactions Demand (D_t) for Money