In the Baumol-Tobin Model of the Transactions Demand for Money,the

question 21

Multiple Choice

In the Baumol-Tobin model of the transactions demand for money,the average money holding will:

• A) increase as the interest rate increases.
• B) increase as wealth increases.
• C) decrease as transaction costs per trip to the bank increase.
• D) increase as expenditure increases.

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