Which of the Following Scenarios Is an Example of the Speculative

question 42

Multiple Choice

Which of the following scenarios is an example of the speculative motive to hold cash?

• A)An oil refining company holds cash to make special purchases of petroleum if the price temporarily drops below a predetermined level.
• B)A government holds cash to make interest payments on its bonds.
• C)A small business holds cash that it will use to purchase equipment at the end of the year.
• D)A firm holds cash to pay its employee wages.

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Definitions:

Phosphorus

A chemical element, essential for life, involved in many cellular processes, including energy transfer and the structure of DNA and RNA.

Inhalation

The act of drawing air or other substances into the lungs.

Primary Consumers

Organisms that feed directly on producers in a food chain, typically herbivores that eat plants.

Trophic Level

The position an organism occupies in a food chain, indicating its level of feeding and energy transfer.