Which of the Following Is NOT a Motivation for Holding

question 21

Multiple Choice

Which of the following is NOT a motivation for holding cash?

• A) to meet its day-to-day needs
• B) to compensate for the uncertainty associated with cash flows
• C) to satisfy bank requirements
• D) to place in short-term investments

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Definitions:

Price Level

An index that measures the average prices of goods and services in an economy at a given time.

AS Curve

The Aggregate Supply curve, depicting the total supply of goods and services that firms in an economy will produce at different price levels.

Classical Theory of Employment

An economic theory that posits that the economy naturally operates at a level of full employment due to the flexibility of prices and wages.

Total Consumption

The aggregate amount of goods and services consumed by individuals and entities in an economy.