Money serves as a medium of exchange, a unit of account and
a store of value.
People hold money for different reasons and our objective is to
find the factors that affect the different reasons for holding money
and then proceed to derive the aggregate demand for money
function for the economy as a whole. In identifying the factors that
affect the demand for money we shall look at the different theories
that have evolved over time. Generally, the theories of money
demand are built around a trade-off between the benefits of holding
more money versus the interest costs of doing so.
No comments:
Post a Comment