According to Keynes, during times of economic depression, people may hold back money instead of investing them into bonds because of
Tap an option to check your answer.
1 mark, −0.33MacroeconomicsDemand for money and monetary theoriesKeynesian liquidity preferenceModerateabout 1 min
UoH 2017 Question 30: Demand for money and monetary theories
Answer and worked solution
Checking your account…
Demand for money and monetary theories has come up 82 times in 7 exams since 2005.
What this question tests
This question is on Keynesian liquidity preference, part of Demand for money and monetary theories in Macroeconomics.
Why people hold money: the transactions, precautionary and speculative motives and the link to interest rates.
TestStop has 25 past-paper questions on this subtopic.
Similar questions from other papers
- Given below are two statements: Assertion A: The nominal interest rate can be misleading guide to cost of borrowing. Reason R: The real interest rate is nominal rate of…
- According to the theory of Keynesian Liquidity Preference, demand for money
- In the context of Keynesian money demand, ceteris paribus, the real demand for money increases when
- Which of the following proposition of demand for money in Keynesian theory has a distinct break with classical theory of demand for money?
- The statement that "currency held in the hand yields no income" is given by
Question from the UoH 2017 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.