Holding money to meet unplanned expenditures is

Question

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Holding money to meet unplanned expenditures falls under the category of precautionary demand for money. This type of demand for money is based on the need for individuals and firms to hold money as a buffer against unexpected or uncertain future expenses. The transactions demand for money is based on the need for money to cover regular and planned expenses, while the capital demand for money is driven by investment decisions. The asset demand for money refers to holding money as a store of value rather than for transactional or precautionary purposes.

Holding Money to Meet Unplanned Expenditures Is