Multiple Choice
According to the Baumol-Tobin square-root formula, money demand for transactions
A) depends only on the level of income
B) depends only on the cost of illiquidity
C) varies inversely with both the interest rate and the level of income
D) increases as the interest rate decreases or income increases
E) decreases as the cost of illiquidity increases
Correct Answer:
Verified
Correct Answer:
Verified
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