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The overall variables directly affect the demand function, and the level of influence varies according to the type of relationship between those variables and the money demand function, which is the cornerstone of monetary theory. Indeed, Friedman believes that monetary theory is a theory of money demand in the first place, and the demand for money if Looking at it from a historical angle, interest in it began under the Cambridge School, which replaced the speed of money circulation with the speed of income circulation, and thus achieved a qualitative shift in monetary theory that occurred through its focus on the subjective aspect, that is, the demand for money. Then the research went into great depth on this topic by other economists, especially Keynes, who classified the demand for money according to the motives through which he gave exceptional importance to the interest rate in influencing money demand. Studies continued after him to reach their level with (Milton Friedman), whose contributions in this field can be said to have been represented by two aspects: the concept of stability, that is, the stability of the money demand function and the stability of the speed of circulation. The research dealt with the relationship between independent economic variables (domestic product, exchange rate, interest rate). ) and the demand function for money.
Ruaa Naser (Sat,) studied this question.
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