Which of the Following Would Be an Example of the "Transactions

question 124

Multiple Choice

Which of the following would be an example of the "transactions motive" for a firm holding cash balances?

• A) investing "excess cash balances"
• B) anticipating a downturn in the economy
• C) purchase of inventory
• D) take advantage of an anticipated decline in the price of raw materials

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Definitions:

Behaviour

encompasses the actions and reactions of an individual or group in response to external or internal stimuli.

Law of Effect

A principle in psychology proposed by Edward Thorndike that suggests behaviors followed by satisfying outcomes are likely to be repeated, while those followed by unpleasant outcomes are less likely to recur.

Environmental Response

The reaction or adaptation of an entity (individual, community, or organization) to changes in its environmental conditions.

Monitoring Behaviours

The process of observing and assessing individuals' actions or performance to ensure conformity with standards or expectations.