The transactions demand for money is the money households and firms hold in order to pay for goods and services they buy.

Question

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The transactions demand for money refers to the amount of money that households and firms hold in order to facilitate their day-to-day transactions. This includes buying goods and services, paying bills, and making other payments. The transactions demand for money varies depending on the level of economic activity, inflation rates, and other factors that influence the need for money in the economy.

The Transactions Demand for Money Is the Money Households and Firms