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Which of the Following Would Be Classified as Precautionary Demand

Question 57

Multiple Choice

Which of the following would be classified as precautionary demand for money?


A) You keep a $1,000 in a money market account because the return is better than a savings account at your bank
B) You apply for and receive a credit card with a $1,000 limit
C) You put $1,000 in a savings account at your bank for emergencies
D) You put $1,000 in your checking account each month to cover your regular expenses

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