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Give the Limitations of Friedman’s Theory.

Give the Limitations of Friedman’s Theory.

Answers

- Friedman analysis implies that different forms of assets are close substitute, he
does not address how the suitability affects money demand.
- The model takes no notice of time lags involved and their implications to money
demand. It is an improved concept since it may determine the value of variables
from one period to another.
- Its deviation of money demand considers money as an asset but transactions
money demand has not been adequately analyzed

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Kavungya answered the question on March 26, 2019 at 05:46

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