Keynes argued that the precautionary component of the demand for money was primarily determined by the level of people's ________,which he believed were proportional to ________.
A)incomes;wealth
B)incomes;age
C)transactions;income
D)transactions;age

Question

Quizplus · Accepted Answer

Keynes argued that the precautionary component of the demand for money was primarily determined by the level of people's transactions, which he believed were proportional to their income. This is because individuals hold money to prepare for unforeseen expenses, and the amount they hold is related to the volume of their transactions, which in turn depends on their income level.

Keynes Argued That the Precautionary Component of the Demand for Money