The speculative motive for holding money is closely tied to what function of money?
A) Store of wealth
B) Unit of account
C) Medium of exchange
D) Standard of deferred payment
Keynes hypothesized that the speculative component of money demand was primarily determined by the level of
A) interest rates.
D) stock market prices.
Of the three motives for holding money suggested by Keynes, which did he believe to be the most sensitive to interest rates?
A) The transactions motive.
B) The precautionary motive.
C) The speculative motive.
D) The altruistic motive.
Because Keynes assumed that the expected return on money was zero, he argued that people would
A) never hold money.
B) never hold money as a store of wealth.
C) hold money as a store of wealth when the expected return on bonds was negative.
D) hold money as a store of wealth only when forced to by government policy.