A Major Criticism of Keynes' Original Theory of the Demand

question 124

Multiple Choice

A major criticism of Keynes' original theory of the demand for money is that

• A) he made the transaction demand a real demand for money.
• B) he combined separate parts of the demand for money.
• C) he made the demand for money depend on both the interest rate and the level of income.
• D) he assumed the demand for money was directly related to income.

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Definitions:

Electrical Impulse

An electrical charge that moves through neurons, enabling signals to be transmitted throughout the body, including to and from the brain.

Chain Reaction

A series of chemical reactions where the product or by-product of one reaction initiates another.

Contraction

The process of muscle fibers shortening in response to a stimulus, leading to movement or increased tension.

Cardiac

Relating to the heart, especially in terms of its function or diseases.