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Question
What is transaction demand for money? How is it related to the value of transactions over a specified period of time?
What is transaction demand for money? How is it related to the value of transactions over a specified period of time?
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Solution
The principal motive to hold money is to carry out transactions. People earn incomes at discrete points in time and spend it continuously throughout the interval. Transaction demand for money of economy is a fraction of the total volume of transactions over a unit period of time.
The principal motive to hold money is to carry out transactions. People earn incomes at discrete points in time and spend it continuously throughout the interval. Transaction demand for money of economy is a fraction of the total volume of transactions over a unit period of time.
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