Tag: Money Demand

The theory of asset demand also stresses the function of money as a store of value. This theory elaborates on why individuals demand one asset or a typical portfolio of assets over other alternatives. What is an Asset? Asset is a valuable resource that an individual or

This article explains the Keynesian theory of money demand, also known as liquidity preference theory, and elaborates on how it differs from the classical theory. Assumption of Two Assets World Keynes assumed the two assets world, where people can hold their entire portfolios either in money or

The quantity theory of money is a classical theory of money demand; why? You will understand the concept of money demand, reasons to hold money, the classical theory of money demand, and its implications and criticism after reading this article. But before that, we advise