The Transactions Demand for Money Exists Because

question 116

Multiple Choice

The transactions demand for money exists because:

• A)people want to maintain a speculative cash reserve.
• B)people are insensitive to interest rate fluctuations and prefer to hoard money.
• C)people want to be prepared for unplanned emergency expenditures.
• D)people prefer cash over bank deposits.
• E)people do not receive their income at the same time they spend it.

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Definitions:

Price Elasticity

measures how much the quantity demanded of a good responds to a change in the price of that good, with higher elasticity indicating greater sensitivity to price changes.

Electricity Consumption

The total amount of electricity used by individuals, businesses, and other entities within a certain timeframe.

Government

An organized system that establishes rules and regulations, provides services, and enforces laws for a society or community.

Price Elasticity

Measures how the quantity demanded of a good changes in response to a change in the price of that good.