Which one of the following is the most important determinant of speculative demand for money?

Income

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Interest rate

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Profits

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Prices

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Solution

The correct option is C Interest rate
The demand for money for speculative purposes in order to undertake investments for future returns is based upon the rate of interest prevailing in the economy. It is algebraically expressed in the form of a function as: $S_{m} = f (r)$ .

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