The Premise of the Quantity Theory of Money Demand Is

question 28

Multiple Choice

The premise of the quantity theory of money demand is

• A)only gold and silver coins have value.
• B)it is only the quantity of money, and not its quality, that counts.
• C)the most obvious reason that households and businesses demand money is for use in making transactions.
• D)the store of value function of money is more important than the medium of exchange function of money.

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Definitions:

Internal Locus

Refers to believing that one has control over their life events and outcomes as opposed to external forces.

Real-Life Example

An actual, practical instance or occurrence that illustrates or clarifies a principle, concept, or phenomenon, grounding theoretical discussions in everyday experience.

Learned Helplessness

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed, leading to diminished motivation and learning.

External Locus

The belief that one's successes or failures result from external factors beyond their control, as opposed to internal factors like effort and decision-making.