Example sentences of "demand for money is " in BNC.
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| 1 | The nominal demand for money is a stable function of a list of variables which might include the following : ( a ) Total wealth ( W ) . |
| 2 | In this theory , the real demand for money is proportional to real output ( and does not depend on interest rates at all ) . |
| 3 | Thus the demand for money is seen to depend upon the relative yield or attraction of money and a wide range of other assets , and so ‘ money ’ is taken to be an equal substitute for all these other types of assets . |
| 4 | Since the demand for money is related to several variables , according to Friedman and the monetarists , then it may be difficult to measure the precise effect of a change in one of these variables on the demand for money . |
| 5 | Because the demand for money is fairly stable there should be a reasonably predictable effect in terms of increased demand for other assets , which may be real or financial . |
| 6 | The transactions plus precautionary demand for money is termed L 1 . |
| 7 | The demand for money is also influenced by expectations of price changes and the levels of interest rates over the longer term . |
| 8 | Keynesians argue that the demand for money is elastic with respect to interest rates and also unstable . |
| 9 | Monetarists argue that the demand for money is inelastic with respect to interest rates and also fairly stable over time . |
| 10 | The problem is more acute if the overall demand for money is inelastic and is subject to fluctuations . |
| 11 | According to Keynesians , the speculative demand for money is highly responsive to changes in interest rates . |
| 12 | Thus , the demand for money is called a transactions demand . |
| 13 | This demand for money is also likely to depend on national income : the higher the total value of transactions , the more money will be needed to guard against unexpected transactions . |
| 14 | This enables us to combine it with the transactions demand and to suppose that the total transactions and precautionary demand for money is a function of money national income . |
| 15 | However , the major weakness of the Keynesian theory of the demand for money is that it is couched in terms of a choice simply between money and bonds . |
| 16 | Secondly , in the Keynesian function ( where money is a close substitute for bonds ) , the demand for money is interest-elastic because if the rate of interest earned from holding bonds changes , wealth holders are assumed to react only by changing their money holdings ; but in Friedman 's function ( where money is a substitute for all other assets , both financial and real ) , the demand for money is believed to exhibit low interest-elasticity . |
| 17 | Secondly , in the Keynesian function ( where money is a close substitute for bonds ) , the demand for money is interest-elastic because if the rate of interest earned from holding bonds changes , wealth holders are assumed to react only by changing their money holdings ; but in Friedman 's function ( where money is a substitute for all other assets , both financial and real ) , the demand for money is believed to exhibit low interest-elasticity . |
| 18 | This reflects the monetarist view that the demand for money is interest-inelastic . |
| 19 | Notice from graph ( a ) that at an interest rate of 5 per cent , the speculative demand for money is £20 million . |
| 20 | The speculative demand for money is very low at this interest rate and equal to only £5 million . |
| 21 | In Fig. 2 , the reader should be able to confirm that for interest rates above Oi 1 , where the speculative demand for money is zero , the LM curve becomes vertical . |
| 22 | When the demand for money is perfectly interest-elastic , the LM curve is horizontal , as illustrated in Fig. 9 . |