Explain Why Friedman Believed That the Demand for Money Was

question 72

Essay

Explain why Friedman believed that the demand for money was not very sensitive to interest rates even the returns on stocks, bonds and money appear in his demand function.

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Definitions:

Income Statement Accounts

Accounts used to record transactions affecting a company’s income, expenses, and the resulting net income or loss over a period of time.

Balance Sheet Accounts

Categories within the balance sheet that include assets, liabilities, and shareholders' equity, each of which is essential for showcasing the company's financial health.

Natural Business Year

A fiscal year that ends when a business's sales activities are at their lowest point, facilitating easier inventory and activity analysis.

12-month Period

A 12-month period typically refers to a full year, used in financial reporting and analysis to compare performance or changes over the span of a year.