The demand for money is based on a
A) necessity demand and a luxury demand.
B) demand for liquidity and a demand for wealth.
C) speculative demand, a transactions demand, and a precautionary demand.
D) demand for cash, a demand for securities, and a demand for real estate.
E) consumption demand, an investment demand, and a government demand.

Question

Quizplus · Accepted Answer

The demand for money is traditionally divided into three motives: speculative demand, transactions demand, and precautionary demand. Speculative demand relates to holding money for potential future investments, transactions demand is for everyday transactions, and precautionary demand is for unforeseen expenses.

The Demand for Money Is Based on a