The amount of money households and businesses wish to hold will _________ if total spending increases and will _________ transactions technology increases.

Question

Quizplus · Accepted Answer

When total spending increases, the demand for money for transactions purposes increases, leading to an increase in the amount of money households and businesses wish to hold. However, if transactions technology improves (making transactions more efficient), the need to hold money decreases because it becomes easier to make transactions without holding large amounts of cash.

The Amount of Money Households and Businesses Wish to Hold