The stock of money people hold to pay everyday predictable expenses is the:
A) transactions demand for holding money.
B) precautionary demand for holding money.
C) speculative demand for holding money.
D) store of value demand for holding money.

Question

Quizplus · Accepted Answer

The transactions demand for holding money refers to the amount of money individuals and businesses hold for the purpose of making everyday transactions such as purchasing goods and services. It is based on the need for money to facilitate everyday transactions and is therefore directly related to the level of economic activity in an economy. Hence, the best choice is A - Transactions demand for holding money.

The Stock of Money People Hold to Pay Everyday Predictable