According to Keynesian theory, the demand for money (Md) depends on personal level of income (L1) and the rate of interest (L2), giving Md = L1 (Y) + L2 (r). In the aggregate demand for money function, what do L1 and L2 denote?
- AL1: precautionary motive; L2: transactions motive
- BL1: speculative motive; L2: transactions and precautionary motives
- CL1: transactions and precautionary motives; L2: speculative motive
- DL1: transactions motive; L2: precautionary motive