Multiple Choice
The Baumol-Tobin square-root formula predicts that the amount of money balances held should
A) move in the opposite direction from the interest rate
B) move in the same direction as the interest rate
C) increase more than proportionally to increases in the cost of money transactions
D) increase less than proportionally to increases in the level of income
E) both A and D
Correct Answer:
Verified
Correct Answer:
Verified
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