Overview
The speculative motive in economics is a crucial concept that explains why individuals and investors choose to hold cash or liquid assets. This behavior is driven by the anticipation of future price changes, allowing them to seize investment opportunities as they arise. Understanding this motive hel...
Key Terms
Example: Investors often engage in speculation when they buy stocks expecting a price rise.
Example: Cash is the most liquid asset, while real estate is less liquid.
Example: The dot-com bubble in the late 1990s saw tech stocks soar to unsustainable levels.
Example: Investors conduct risk assessments before entering volatile markets.
Example: A new startup may present an investment opportunity for venture capitalists.
Example: The asset price of a stock can fluctuate based on market demand.