The transaction demand for money comes mostly from the fact that
A) money is a store of value.
B) money is a medium of exchange.
C) money is a unit of account.
D) money has low opportunity cost.

Question

Quizplus · Accepted Answer

The transaction demand for money arises from the need for money as a medium of exchange. Money is used to buy goods and services, make payments and settle debts. Money as a store of value, unit of account and having low opportunity cost are important characteristics of money, but they are not the primary reasons for the demand for money in transactions.

The Transaction Demand for Money Comes Mostly from the Fact