Which One of the Following Is the Need to Hold

question 10

Multiple Choice

Which one of the following is the need to hold cash simply as a financial reserve?

• A)Precautionary motive
• B)Opportunistic motive
• C)Speculative motive
• D)Activity motive
• E)Transaction motive

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Definitions:

Official Money Supply

The total amount of monetary assets available in an economy at a specific time, as measured and published by the central bank.

Precautionary Demand

The desire to hold cash or liquid assets as a safeguard against potential financial emergencies.

Speculative Demand

The demand for assets or goods not for their immediate consumption or use, but for the purpose of resale at a higher price in the future.

Transaction Demand

The demand for money as a medium of exchange, influenced by the level of economic activity.