The __________ is a theory of the demand for money developed by John Maynard Keynes that results in an inverse relationship between the quantity demanded of money and the interest rate.

Question

Quizplus · Accepted Answer

The liquidity preference theory is a theory of demand for money developed by John Maynard Keynes, which postulates that there is an inverse relationship between the quantity demanded of money and the interest rate. The speculative demand for money, precautionary motive, and transaction motive are all related to the reasons why people hold money, but do not explain the inverse relationship between the quantity demanded of money and the interest rate.

The __________ Is a Theory of the Demand for Money