The transaction motive for holding cash is the demand for cash needed to take advantage of unusual cash discounts for needed materials.

Question

Quizplus · Accepted Answer

The transaction motive for holding cash refers to the need to have cash on hand for the day-to-day operations of the business, such as paying bills and purchasing supplies, not specifically for taking advantage of unusual cash discounts.

The Transaction Motive for Holding Cash Is the Demand for Cash