Tobin's Model of the Speculative Demand for Money Shows That

question 9

Multiple Choice

Tobin's model of the speculative demand for money shows that people hold money as a ________ as a way of reducing ________.

• A)medium of exchange;transaction costs
• B)medium of exchange;risk
• C)store of wealth;transaction costs
• D)store of wealth;risk

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Definitions:

Compounded Semi-Annually

A method of interest calculation where the interest on the initial principal and any accumulated interest is calculated twice a year.

Future Value

The value of an investment at a specified date in the future, considering factors like interest rates and time.

Compounded Semi-Annually

Interest calculation method where the compounding occurs twice a year, impacting the total interest earned or paid on investments or loans.

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, with certain tax benefits.