Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Holding money for future investment opportunities
B
Keeping money to make everyday purchases
C
Saving money for emergencies
D
Speculating on currency values
Understanding the Answer
Let's break down why this is correct
Answer
The transaction motive for money demand refers to the need people have to hold money for everyday transactions. This means that individuals and businesses want to keep a certain amount of cash on hand to pay for goods and services, like groceries or rent. For example, if you receive your paycheck, you might keep a portion of that money in your wallet to buy lunch or pay bills, rather than investing it all. This demand for money helps ensure that people can smoothly conduct their daily activities without delays. Overall, the transaction motive highlights the importance of having money readily available to meet immediate spending needs.
Detailed Explanation
People hold money to buy things they need every day. Other options are incorrect because Some might think this means saving for future investments; This option suggests saving for emergencies.
Key Concepts
transaction motive
Topic
Money Demand and Supply Effects
Difficulty
easy level question
Cognitive Level
understand
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