Holding cash for precautionary demand refers to:
A)keeping cash on hand to pay for emergency needs.
B)holding cash to compensate banks for the services they perform.
C)keeping money in the bank to pay bills for the goods and services they use.
D)keeping cash to take advantage of unexpected opportunities.

Question

Quizplus · Accepted Answer

Holding cash for precautionary demand means keeping cash on hand to pay for emergency needs like sudden medical expenses, job loss, or unexpected repairs. It is a way to provide for unforeseen expenses without having to rely on credit or selling assets.

Holding Cash for Precautionary Demand Refers To