Answer to Question #145126 in Macroeconomics for December

Question

8. Suppose there is an increase in the total remuneration earned by the factors of production. How
this will influence the demand for money?
[1] The demand for active balances will increase and shift L2 to the right.
[2] The demand for transaction purposes will increase and shift L1 to the right.
[3] The demand for passive balances will decrease and shift L1 to the left.
[4] Speculative demand for money will decrease and shift L2 to the left.

Answer 1

[4] speculative demand for money will decrease and shift L2 to the left