The creation of savings plans such as savings deposits and money market mutual a
ID: 1226654 • Letter: T
Question
The creation of savings plans such as savings deposits and money market mutual accounts that allow easy transfer of funds between interest-earning assets and checkable deposits tends to A. increase the demand for money. B. reduce the demand for money. C. lower the cost of holding money. D. increase the risk of holding money.The creation of savings plans such as savings deposits and money market mutual accounts that allow easy transfer of funds between interest-earning assets and checkable deposits tends to A. increase the demand for money. B. reduce the demand for money. C. lower the cost of holding money. D. increase the risk of holding money.
Explanation / Answer
Answer) B. reduce the demand for money.
people are more likely to use a bond fund strategy when the cost of transferring funds is lower that predicts the lower money demand.
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