Which is true of the demand for money?

Question

Quizplus · Accepted Answer

The demand for money is made up of two components: transactions demand and asset demand. Transactions demand is the need for money to make purchases and pay for expenses, while asset demand is the desire to hold money as an investment.

Answer: D
 The demand for money is determined by real income, which is the amount of goods and services that can be purchased with a given amount of money. As real income rises, the demand for money also increases as people have more funds to allocate toward transactions and investments.

Therefore, both options B and D are correct.

Which Is True of the Demand for Money