Comparing Tobin's Model of the Speculative Demand for Money with Keynesian

question 5

Multiple Choice

Comparing Tobin's model of the speculative demand for money with Keynesian speculative demand

• A)both models imply that individuals hold only money or only bonds.
• B)the Keynesian model implies individuals diversify their asset holdings,while the Tobin model predicts that individuals hold only money or only bonds.
• C)the Tobin model implies individuals diversify their asset holdings,while the Keynesian model predicts that individuals hold only money or only bonds.
• D)both models imply that individuals diversify their asset holdings.

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Definitions:

Laws of Physics

The laws of physics are the fundamental principles that describe the behavior of the physical universe, including concepts of energy, motion, forces, and matter interactions.

Sunlight

the light and energy that comes from the sun, essential for photosynthesis in plants and influencing Earth's climate and weather.

Second Law

Also known as the second law of thermodynamics, it states that the total entropy of an isolated system can never decrease over time, and is central to the direction of heat transfer and the efficiency of heat engines.

Entropy

A measure of the disorder or randomness in a system, often associated with the second law of thermodynamics.