Tobin's model of the speculative demand for money shows that people hold money as a store of wealth as a way of
A)reducing risk.
B)reducing income.
C)avoiding taxes.
D)reducing transactions cost.

Question

Quizplus · Accepted Answer

Tobin's model suggests that people hold money as a store of wealth as a way of reducing risk. Holding money can provide a buffer against emergencies and unexpected events, reducing the risk associated with being without liquid assets.

Tobin's Model of the Speculative Demand for Money Shows That