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In what ways would you expect each of the following to affect the demand for real money balances? In each case, state which motive for
In what ways would you expect each of the following to affect the demand for real money balances? In each case, state which motive for holding money is affected (if any):
a) An increase in real GNP
b) An increase in confidence about the future
c) A fall in nominal interest rates
d) An increase in the interest differential between risky assets and time deposits
e) A fall in the frequency of income payments i.e. a switch from weekly to monthly payment.
f) An increase in the monetary base brought about by the central bank.
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