When Households Hold Money for Unplanned Expenditures and Emergencies, It

question 55

Multiple Choice

When households hold money for unplanned expenditures and emergencies, it is called

• A) the speculative demand for money.
• B) the transactions demand for money.
• C) the irrational demand for money.
• D) the precautionary demand for money.

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Definitions:

Heat Pump

A device used for heating or cooling a building by transferring heat between two reservoirs, usually between an indoor environment and the outdoor air.

Furnace

A device used for high-temperature heating, commonly for residential heating or metallurgical processes.

Monthly Budget

A financial plan that allocates expected income towards expenses, savings, and debt repayment on a monthly basis.

Net Income

The amount of income that remains after deducting all expenses, taxes, and costs from gross income.