The transaction demand for money does not vary with this quantity, but the asset demand does.
The transaction demand for money does not vary with this quantity, but the asset demand does. This quantity is inversely related to the amount of investment because investment will only occur if the rate of return exceeds this quantity. This quantity is low in a liquidity trap, where investors avoid certain assets whose price would decline with a rise in this quantity; those assets are bonds. Overnight transactions between banks are governed by the Fed Funds one. For 10 points, name this payment to encourage deferment of consumption, made to a lender.
The transaction demand for money does not vary with this quantity, but the asset demand does.
real {interest} rate