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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.
Average Propensity to save The Average Propensity to Save [APS] is defined as the fraction of aggregate national income which is devoted to savings. Thus if S denotes savin
how realistic is the sales maximisation model
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Determinants of Demand Price elasticity of demand fluctuates from commodity to commodity. Whereas the demand of some commodities is highly elastic, demand for others is highly
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I. A farmer – businessman is in a quandary as to what crop to plant in his land. He has the option to plant Crop A, Crop B, or Crop C. f the weather turns out to be good and the
Discuss the full cost pricing and marginal cost pricing method. Explain how the two methods differ from each other.
elasticity concepts occupies a central place in policy formulation explain in details
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