Graphically combined transactions and asset demand
Describe how transactions demand and asset demand both can be combined graphically to estimate total money demand.
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In a graph measuring the interest rate vertically & the amount of money demanded horizontally, the two of the demands for the money curves can be summed up horizontally to obtain the total demand for money.
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Describe the factors affecting the option of a minimum cash balance amount. The minimum cash balance amount is find out by how easy it is to increase funds when needed, how predictable the cash flows are, and how risk averse managers are.
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