One factor contributing to the increased instability of money demand is:

Question

Quizplus · Accepted Answer

The rise in use of near monies, such as money market funds and other short-term financial assets that are not considered part of the traditional money supply, has contributed to the increased instability of money demand. This is because people can easily and quickly shift their holdings between these near monies and traditional money, depending on factors such as interest rates and economic conditions. As a result, the demand for traditional money can become more unpredictable and volatile. The other answer choices (A, B, and D) do not accurately describe factors that contribute to the increased instability of money demand.

One Factor Contributing to the Increased Instability of Money Demand