The transactions demand for holding money is when people hold money:
A) instead of near money.
B) to transact purchases they expect to make.
C) as insurance against unexpected expenses.
D) to speculate in the stock market.
E) to take advantage of changes in interest rates.

Question

Quizplus · Accepted Answer

The transactions demand for holding money refers to holding money to make purchases that people expect to make. This is different from holding money as a store of value or as a speculative investment. Therefore, choice B is the best answer.

The Transactions Demand for Holding Money Is When People Hold