Which Two of the Following Require Liquidity but Do Not

question 77

Multiple Choice

Which two of the following require liquidity but do not necessarily require cash reserves?

• A) Transaction and precautionary motives
• B) Compensating balance requirement and precautionary motive
• C) Compensating balance requirement and transaction motive
• D) Speculative and transaction motives
• E) Precautionary and speculative motives

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Definitions:

Average Prices

The mean value of a set of prices, calculated by adding all the prices together and dividing by the number of prices.

Supermarket Chains

Large retail organizations that own and operate multiple supermarket outlets, offering a wide range of food and household products.

Incentive

Something that motivates or encourages an individual or group to act or perform in a certain way.

Observational Study

A research method where outcomes are observed in a natural setting without manipulation by the researcher.