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Explain the factors that influence the modern quantity theory of money

      

Explain the factors that influence the modern quantity theory of money

  

Answers


Dana
Total wealth: demand for money is directly related to the total wealth as along as wealth holders regard money as a normal good
Expected rate of return on the various forms of wealth: since the rate of return on bonds and equities represent the opportunity cost of holding money, demand for money is inversely relate to the expected rate of return.
Ratio of human wealth to nonhuman wealth: the higher the ratio, the greater the demand for money to compensate for the limited marketability of human wealth
Society’s tastes and preferences: demand for money also depends on various factors that influence wealth holders’ tastes and preferences or money

Dana05 answered the question on August 14, 2019 at 07:22


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