This is “Money Demand”, chapter 20 from the book Finance, Banking, and Money (v. 1.0). For details on it (including licensing), click here.

For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. You may also download a PDF copy of this book (8 MB) or just this chapter (373 KB), suitable for printing or most e-readers, or a .zip file containing this book's HTML files (for use in a web browser offline).

Has this book helped you? Consider passing it on:
Help Creative Commons
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you.
Help a Public School
DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.

Chapter 20 Money Demand

Chapter Objectives

By the end of this chapter, students should be able to:

  1. Describe Friedman’s modern quantity theory of money.
  2. Describe the classical quantity theory.
  3. Describe Keynes’s liquidity preference theory and its improvements.
  4. Contrast the modern quantity theory with the liquidity preference theory.