Economics · Demand for Money
In Baumol's theory of transaction demand for money, money demand is:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1a decreasing function of bond supply and rate of interest, but an increasing function of brokerage fee.
- 2a decreasing function of rate of interest, and an increasing function of nominal GDP and brokerage fee.✓
- 3a decreasing function of nominal GDP and rate of interest, but an increasing function of brokerage fee.
- 4an increasing function of bond supply, brokerage fee, and rate of interest.
Correct answer
a decreasing function of rate of interest, and an increasing function of nominal GDP and brokerage fee.
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