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Eduncle posted an MCQ
October 20, 2019 • 16:41 pm 0 points
  • UGC NET
  • Economics

According to Monetarists, demand for money function is

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    Eduncle Best Answer

    The Quantity Theory of Money : This can be taken to lead to different propositions :
    (i) the velocity of circulation is constant orat least stable (Fisher (1911))
    (ii) the demand for money is interest inelastic (Friedman (1959), Friedman and Meiselman (1963));
    (iia) the demand for money has low interest elasticity (Friedman (1959), Laidler (1906));
    (iii) the demand for money is more stable than the consumption function: that is, the money multiplier is larger than the fiscal multiplier (Friedman (1959), Friedman and Meiselman (1963), Andersen and Jordan (1968)); and
    (iv) the money stock and changes in the money stock are the most important determinants of aggregate economic activity as represented by nominal GNP (Friedman (1956), (1958)), or, money causes income “(Friedman and Schwartz (1963), Sims (1972)). 

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