The component of aggregate demand is speculation balance that is held for investment is shares or currency where fluctuations create capital gains. The decision to hold speculative balances is mere to maximize profits, they are held as a form of wealth. This is in contradiction to the Keynesian school of thought which indicates that money does not generate income and that speculative balances are held in order to avoid the losses that could occur from holding other assets.

However, the Keynesian school of thought that money does not earn income does not apply as in recent times, checking accounts which are also considered cash also earn interest in some places. Due to its relationship to other assets, as described by the Keynesian school of thought, the money is held in to ward of risks, and it is therefore related to the costs of other assets, therefore if interest levels falls, the price of financial instruments rises due to the increase in yield on instruments as compared to deposits, and when this occurs, the prices of assets rise and there is a risk of the prices of financial instruments falling, which is why there is higher speculative demand in times of higher interest rates. The third component of money demand is a precautionary demand which indicates that some money is kept as a reserve in case of disasters so that the money can be useful in times of crisis. (Mushin, 2002)

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