Tobin's Model of the Speculative Demand for Money Improves on Keynes's

question 89

Multiple Choice

Tobin's model of the speculative demand for money improves on Keynes's analysis by showing that

• A)the speculative demand for money is interest insensitive.
• B)the transactions demand for money is interest insensitive.
• C)people will hold a diversified portfolio.
• D)people will hold money or bonds but not both.

---

Definitions:

Production Techniques

Methods and processes used in the transformation of inputs into outputs (goods or services).

Efficient Markets Hypothesis

A financial theory suggesting that asset prices fully reflect all available information, making it impossible to consistently achieve higher than average returns.

Fundamental Analysis

A method of evaluating a security to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors.

Fundamental Analysis

An approach in finance that assesses securities by attempting to measure their intrinsic value through examining related economic, financial, and other qualitative and quantitative factors.