The most responsive to interest rate changes is the _______ demand for money.

Question

Quizplus · Accepted Answer

The speculative demand for money refers to the desire to hold money to take advantage of future investment opportunities, such as buying stocks or other financial assets. This demand is more sensitive to changes in interest rates than the other two types of demand for money (transactions and precautionary), as individuals are more likely to invest their money when interest rates are higher, reducing their speculative demand for money.

The Most Responsive to Interest Rate Changes Is the _______