WebThe demand for money is expressed as a function of the choice of liquidity L 1 and L 2. Liquidity preference takes the following form (199): M= M 1 + M 2 = L 1 (Y) + L 2 (r) (2) By incorporating the concept of liquidity preference into the theory of demand for money, Keynes argued that money supply in conjunction with liquidity WebSpeculative demand is the holding of real balances for the purpose of avoiding capital loss from holding bonds or stocks. The net return on bonds is the sum of the interest payments and the capital gains (or losses) from their varying market value. A rise in interest rates causes aftermarket bond prices to fall, and that implies a capital loss ...

Speculative demand for money - Wikipedia

WebCorrect option is D) Keynes in his theory of demand for money, first considers the liquidity preference- how much of the assets people want to hold in terms of money. After that … WebMonetarism revolves around the inflow of money into the economy, while Keynesianism advocates control over the demand for goods and services. Monetarists believed that … genshin impact sumeru desert waypoints

Answered: Keynes

WebAccording to Keynes the demand for money refers to the desire to hold money as an alternative to purchasing an income-earning asset like a bond. All theories of … WebAnswer» C. precautionary motive. Explanation: According to Keynes, money is demanded because of three motives -transaction, precautionary and speculative. The first two … WebIn The General Theory, Keynes distinguishes between three motives for holding cash ‘ (i) the transactions-motive, i.e. the need of cash for the current transaction of personal and … chris caulk prank call