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Theory Of Money Demand


wealthymattersThe demand for money is the amount of assets or wealth that people want to hold in the form of cash. This, in turn, is a function of the volume and frequency of their transactions as well as of interest rates (i.e. the opportunity cost of holding cash). There is also a third component, which is the precautionary demand for money. In  cash constrained economies, the precautionary demand for money is higher.

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About Keerthika Singaravel
Engineer,Investor,Businessperson

2 Responses to Theory Of Money Demand

  1. Eva Gaspar says:

    Happy New Year !!!

    Thank You!

    • Thanks. And the same to you.

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