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:

Long-term Debt

Financial obligations of a company or individual that are due after a period of one year or more.

Trade Credit

Debt arising from credit sales and recorded as an account receivable by the seller and as an account payable by the buyer.

Discounts

A reduction from the usual cost of something, often applied to prompt payment or to certain categories of customers.

Increase

A rise in value, quantity, or some other measure.