Economics · Macroeconomics

According to the Baumol-Tobin model, the optimal amount of money held for transactions is inversely related to the:

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Price level
2Transaction cost (brokerage fee)
3Interest rate✓
4Level of income

Correct answer

Interest rate

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According to the Baumol-Tobin model, the optimal amount of money held for transactions is inversely related to the:

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According to the Baumol-Tobin model, the optimal amount of money held for transactions is inversely related to the:

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