In the Cambridge equation for money demand, what does "k" represent?

CA Foundation · Business Economics · MTP · January 2025
In the Cambridge equation for money demand, what does "k" represent?
(A) A. The velocity of money
(B) B. The money supply
(C) C. The income elasticity of money demand
(D) D. The proportion of income held as money

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. The proportion of income held as money

Topics: Business Cycles

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