Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

"The larger is the quantum of transactions to be made, the smaller is the quantity of money demanded."

Which of the following options is true in regards to the above statement?

Options:

The statement is true

The statement is false

The statement is partially true

The statement is partially false

Correct Answer:

The statement is false

Explanation:

Since money is required to conduct transactions, the value of transactions will determine the money people will want to keep: the larger is the quantum of transactions to be made, the larger is the quantity of money demanded.