If gold becomes acceptable as a medium of exchange, the demand for gold will __________ and the demand for bonds will ________, everything else held constant.
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1 mark, −0.33MacroeconomicsDemand for money and monetary theoriesKeynesian liquidity preferenceModerateabout 1 min
UoH 2020 Question 53: Demand for money and monetary theories
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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.
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