Three important motives for people to hold money and forego earning interest payments are:
A)the opportunity cost motive, precautionary motive and speculative motive.
B)the transaction motive, precautionary motive and speculative motive.
C)the transaction motive, safety motive and speculative motive.
D)the transaction motive, precautionary motive and special motive.
E)the future motive, precautionary motive and speculative motive.

Question

Quizplus · Accepted Answer

The most commonly recognized motives for holding money are the transaction motive, which involves holding money to make purchases or payments in the near future, the precautionary motive, which involves holding money to be prepared for unexpected expenses or temporary drops in income, and the speculative motive, which involves holding money in anticipation of future opportunities to make investments or earn returns. The other choices either include incorrect motives (e.g. "safety motive" in option C) or include a made-up motive ("special motive" in option D). Option E includes a vague and unclear motive ("future motive") that is not commonly recognized in economics.

Three Important Motives for People to Hold Money and Forego