If the speculative demand for money is zero in a financially developed economy, as some have claimed,
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If the speculative demand for money is zero in a financially developed economy, as some have claimed, is the precautionary demand for money also zero? Evaluate with reference to both M1, M2 and broader monetary aggregates. If both the speculative and precautionary components of money demand are zero, what about the transactions demand? Consider both households and firms in your answer.
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