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Eduncle posted an MCQ
October 19, 2019 • 16:44 pm 0 points
  • UGC NET
  • Economics

According to the cash-balance approach, the elasticity of demand for money

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    Eduncle Best Answer

    The cash-balance approach holds that the real demand of money, , is some proportion of economy's real income or output, Y. Hence, a percentage change in Y will result in an equal percentage change in demand for real money balances. This will yield the elasticity of demand for money equal to 1.

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