Comparing Tobin's model of the speculative demand for money with Keynesian speculative demand
A)both models imply that individuals hold only money or only bonds.
B)the Keynesian model implies individuals diversify their asset holdings,while the Tobin model predicts that individuals hold only money or only bonds.
C)the Tobin model implies individuals diversify their asset holdings,while the Keynesian model predicts that individuals hold only money or only bonds.
D)both models imply that individuals diversify their asset holdings.

Question

Quizplus · Accepted Answer

Tobin's model suggests that individuals diversify their asset holdings between money and bonds based on their expectations of interest rate changes, unlike the Keynesian speculative demand for money, which posits that individuals choose between holding all money or all bonds based on their expectations of interest rate movements.

Comparing Tobin's Model of the Speculative Demand for Money with Keynesian