The motive for holding money as a reserve for future emergencies and to cover extraordinary expenses is referred to as the:

Question

Quizplus · Accepted Answer

The precautionary motive for holding money refers to the desire to hold cash to guard against unexpected events and emergencies that may require immediate expenditure. This contrasts with the transactions motive, which is about holding money for everyday transactions, and the speculative motive, which involves holding money to take advantage of future investment opportunities.

The Motive for Holding Money as a Reserve for Future