The Fed’s Primary Task - Benefit of holding money
3 important questions on The Fed’s Primary Task - Benefit of holding money
What happens to the quantity of money demanded as income increases?
An increase in earnings leads to a greater desire to hold money for transactions.
How does the price level affect money demand?
Higher prices create a greater requirement to hold additional money.
What effect do technological advancements have on money holding?
Technology like ATMs and online banking reduces the cash amount needed.
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