Question:
According to the Baumol-Tobin transaction demand for money approach, the optimum number of transactions is
According to the Baumol-Tobin transaction demand for money approach, the optimum number of transactions is
Updated On: Mar 10, 2024
- inversely related to income and directly related to transaction costs and interest rate
- directly related to interest rate and income and inversely related to transaction costs
- inversely related to income, interest rate and transaction costs
- directly related to income, interest rate and transaction costs
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The Correct Option is B
Solution and Explanation
The correct answer is (B) : directly related to interest rate and income and inversely related to transaction costs.
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