According to the "square-root rule" of the transactions demand for money,the demand for money would

Question

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The "square-root rule" suggests that the demand for money varies less than proportionately with income (C), varies inversely with the interest rate because higher rates make holding money more costly compared to interest-earning assets (A), and would be zero if there were no costs to switching between money and interest-earning assets, as the rule assumes some costs exist for such transactions (B). Therefore, all of the statements are correct in the context of the square-root rule.

According to the "Square-Root Rule" of the Transactions Demand for Money,the