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The desire to hold money.
The percentage change in
real money balances demanded divided by the percentage change in real
income provoking it. A measure of the sensitivity of real money balances
demanded to changes in real income.
The percentage change in
real money balances demanded divided by the percentage change in the
interest rate which provokes it. A measure of the sensitivity of real money
balances demanded to changes in the interest rate.
The curve presenting real
money balances demanded as an inverse function of the interest rate, with
the level of real income constant at a specified level.
The interest rate at which
liquidity preference curves flatten out. The demand for real money balances
becomes infinitely interest elastic.
The function relating real
money balances demanded to its determinants (the market interest rate and
real income, in this book).
A bond which has no maturity
date. It yields a specified income payment in perpetuity.
A desire for money balances
as insurance against having to sell assets or borrow to cover shortages
arising from unforeseen variations in payment and receipt streams.
Holding money rather than
securities because of an expectation that interest rates will rise in the
future and produce capital losses on securities.
The desire to hold money
because it is useful in effecting transactions.
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