A Major Difference Between the Transactions Demand for Money and the Precautionary

question 173

Multiple Choice

A major difference between the transactions demand for money and the precautionary demand is that the

• A) transactions demand means that people are foregoing interest but they are not foregoing interest in the precautionary demand.
• B) transactions demand leads to the purchase of assets while the precautionary demand does not.
• C) transactions demand involves expected expenditures while the precautionary demand involves unexpected expenditures.
• D) transactions demand is for emergencies while the precautionary demand is for every day expenditures.

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Definitions:

Inherently Related

Describes things that are naturally or fundamentally connected or linked to each other.

Latent Learning

A form of learning that is not immediately expressed in an overt response; it occurs without obvious reinforcement.

Tolman

An American psychologist known for his work in cognitive psychology and for his theory that learning involves the formation of mental maps.

Classically Conditioned

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.