Baumol’s Transaction theory relates to

A. Debt

B. Definition

C. Demand for Money

D. None of these

Detail of Mcqs:

The Baumol model is used to determine the appropriate level of cash, which will minimize the total transaction costs and alternative costs as a result of maintaining a given level of cash. Baumol-Tobin model shows that demand for money depends positively on the income level and negatively on the interest rate. 

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