When people hold money to transact purchases they expect to make, this is known as the:
A) precautionary demand for money.
B) liquidity demand for money.
C) spending demand for money.
D) speculative demand for money.
E) transactions demand for money.

Question

Quizplus · Accepted Answer

The transactions demand for money refers to the demand for money to facilitate day-to-day purchases and transactions. This includes holding money for regular expenses such as groceries, rent, and other daily essentials.

When People Hold Money to Transact Purchases They Expect to Make