A Major Point of the Baumol-Tobin Model of the Transactions

question 103

Multiple Choice

A major point of the Baumol-Tobin model of the transactions demand for money is that they show that the

• A)demand for money is related to income.
• B)velocity of money is constant.
• C)fraction of income that people wish to hold in the form of money is constant.
• D)interest sensitivity of the demand for money is based on a transactions motive shared by most people.

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