The difference between the Baumol-Tobin formulation of the demand for money and the Keynesian-Baumol formulation is that
A) the speculative demand is a function of income.
B) the transaction demand is a function of interest rates as well as income.
C) the transaction demand is a function of wealth.
D) Both B and C are correct.
D
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As the price of labor increases relative to the price of capital, the firm will move to a more labor-intensive production method to minimize costs
Indicate whether the statement is true or false
This year, on advice from your sister, you bought tobacco company stock at $50/share. During the year, you collected an $8 dividend, but due to the company's losses in medical lawsuits its stock fell to $40/share
At this point, you sell, realizing a A) dividend yield of -16% and a capital loss of 20%. B) dividend yield of 16% and a capital loss of 20%. C) dividend loss 10%. D) capital loss of 10%. E) total loss of 20%.