The transactions demand for money is most closely related to the function of money as a
A) unit of account.
B) medium of exchange.
C) store of purchasing power.
D) hedge against inflation.
E) standard of deferred payment.

Question

Quizplus · Accepted Answer

The transactions demand for money is the amount of money needed to carry out everyday transactions, such as buying goods and services. This is most closely related to the medium of exchange function of money, which allows individuals to exchange goods and services with one another using a commonly accepted form of money.

The Transactions Demand for Money Is Most Closely Related to the Function