Which of the following is NOT one of the four determinants of the Friedman's demand for money?

CA Foundation · Business Economics · PYQS · May 2025
Which of the following is NOT one of the four determinants of the Friedman's demand for money?
(A) A. Nominal Demand for money is a function of total wealth.
(B) B. It is positively related to price level P, if price level rises the demand for money increases.
(C) C. Nominal demand for money falls if the opportunity costs of money holding declines.
(D) D. Nominal Demand for money is influenced by inflation.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Nominal demand for money falls if the opportunity costs of money holding declines.

Topics: Money Market

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