Which model of money demand minimises the cost of converting non-money assets into money?

CA Foundation · Business Economics · MTP · May 2026
Which model of money demand minimises the cost of converting non-money assets into money?
(A) A. Cambridge approach
(B) B. Baumol-Tobin model
(C) C. Quantity theory
(D) D. Liquidity preference theory

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Baumol-Tobin model

Topics: Money Market

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