What is the primary reason for people to own or hold money?
A) because money has a guaranteed nominal return
B) because money has a guaranteed real return
C) because money can be used directly to buy goods and services
D) because money functions as a unit of account

Question

What is the primary reason for people to own or hold money?  
A) because money has a guaranteed nominal return 
B) because money has a guaranteed real return 
C) because money can be used directly to buy goods and services 
D) because money functions as a unit of account

Quizplus · Accepted Answer

The primary reason for people to own or hold money is because it can be used directly to buy goods and services. Money serves as a medium of exchange and facilitates transactions in the economy.

Option A is incorrect because money does not have a guaranteed nominal return. The return on money depends on various factors such as inflation, interest rates, and market conditions.

Option B is incorrect because money does not have a guaranteed real return. In fact, holding money results in a negative real return due to inflation.

Option D is also incorrect because while money functions as a unit of account, it is not the primary reason for people to own or hold money.

What Is the Primary Reason for People to Own or Hold