Demand for money, Managerial Economics

Assignment Help:

Demand for money 

The demand for money is a more difficult concept than the demand for goods and services.  It refers to the desire to hold one's assets as money rather than as income-earning assets (or stocks).

Holding money therefore involves a loss of the interest it might otherwise have earned.  There are two schools of thought to explain the demand for money, namely the Keynesian Theory and the Monetarist Theory.

The demand for money and saving

The demand for money and saving are quite different things.  Saving is simply that part of income which is not spent.  It adds to a person's wealth.  Liquidity preference is concerned with the form in which that wealth is held.  The motives for liquidity preference explain why there is desire to hold some wealth in the form of cash rather than in goods affording utility or in securities. 


Related Discussions:- Demand for money

What is the minimum cost of producing each level of output, Suppose that in...

Suppose that in an isoquant mapping, you should consider three isoquants with 1000, 2000 & 3000 units of output. The price of capital is Rs 2 a unit, and the price of labor is Rs 1

Real and nominal wages, Real and nominal wages Wages are wanted only f...

Real and nominal wages Wages are wanted only for what they will buy, real wages being wages in terms of the goods and services that can be bought with them.  Nominal wages

Proportion of market supplied - determinants of demand, Q. Proportion of Ma...

Q. Proportion of Market Supplied - Determinants of Demand? Price elasticity of market demand moreover relies on the proportion of market supplied at the determined price. If le

Production-possibilities, a) A change in demand means that: b) On the pr...

a) A change in demand means that: b) On the production-possibilities drawing, unemployment is represented by:

Remedies for unemployment, REMEDIES FOR UNEMPLOYMENT The measures appro...

REMEDIES FOR UNEMPLOYMENT The measures appropriate as remedies for unemployment will clearly depend on the type and cause of unemployment.  Broadly they can be divided into:

To what extent has the imf achieved its objectives?, To what extent has the...

To what extent has the IMF achieved its objectives? The objective of achieving full convertibility of currencies has not been achieved.  In the first place countries impose re

The multiplier, The Multiplier In his theory Keynes asserted that cons...

The Multiplier In his theory Keynes asserted that consumption is a function of income, and so it follows that a change in investment, which we may call ΔI, meaning an incremen

Limitations, limitations of managerial ecomomics

limitations of managerial ecomomics

Function and importance, explain the supply function and importance of supp...

explain the supply function and importance of supply analysis in brief

Theories associated with different market structures, Theories associated w...

Theories associated with different market structures A firms profit maximising output decisions take into account the market structure under that they operate. There are 4 type

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd