If people want to hold money that is convenient for the day-to-day buying and selling of products, then there is a(n)
A) rise in the money supply.
B) speculative demand for money.
C) transactions demand for money.
D) asset demand for money.
E) precautionary demand for money.

Question

Quizplus · Accepted Answer

The transactions demand for money refers to the amount of money people want to hold for their everyday transactions such as buying goods and services. This type of demand for money is driven by the need for money as a medium of exchange. As such, an increase in the transactions demand for money results in a higher demand for money supply to facilitate the day-to-day transactions.

If People Want to Hold Money That Is Convenient for the Day-To-Day