The precautionary demand for money is the demand for money:Group of answer choicesto cover unexpected events.for normal investment purposes.for normal transactions purposes.for special stock purchases.
Question
The precautionary demand for money is the demand for money:Group of answer choicesto cover unexpected events.for normal investment purposes.for normal transactions purposes.for special stock purchases.
Solution
The precautionary demand for money is the demand for money to cover unexpected events. This is because it refers to the money that individuals hold for unexpected expenses or emergencies. It's a form of self-insurance against unforeseen situations where immediate payment might be necessary.
Similar Questions
Which of the following describes the transactions and precautionary demand for money?Multiple choice question.The demand for money to transfer the purchasing power from the present to the futureThe demand for money as a yardstick for measuring the relative worth of goods and servicesThe demand for money as a medium of exchangeThe demand for money as a store of value
Why would people hold money other than transactionary and precautionary demand for money?
Which of the following best describes the transactions demand for money?Multiple choice question.People hold money because it can be used as an asset.People hold onto money when inflation is high.People need money as a precaution.People need money to buy goods and services.
Which of the following describes the transactions demand for money?Multiple choice question.The money needed to buy goods and servicesThe demand for money as a store of wealthThe demand for money to guard against having a tyre puncture when on holidayThe demand for money as a backup to pay for occurrences that are not regular
supply and demand for money
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