According to Milton Friedman,the Demand for Money Is Insensitive to Interest

question 83

Multiple Choice

According to Milton Friedman,the demand for money is insensitive to interest rates because

• A)the demand for money is insensitive to changes in the opportunity cost of holding money.
• B)competition among banks keeps the opportunity cost of holding money relatively constant.
• C)people base their investment decisions on expected profits,not interest rates.
• D)transactions are not subject to scale economies as wealth increases.

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Definitions:

Competency

An individual's ability or skill in performing a task effectively.

Occupational Licensing

A regulatory process requiring individuals to secure a professional license before practicing certain trades or professions, often aimed at ensuring quality and safety.

Market Competitiveness

The level to which companies or products within a market contend with one another, often determined by the number of competitors, product differentiation, and market power.

Regulators

Authorities or agencies responsible for supervising and enforcing laws and standards within specific industries or areas to protect the public interest.