Alberto purchases ten cups of coffee a week. The amount of money that he holds to purchase ten cups of coffee is the

Question

Quizplus · Accepted Answer

The amount of money Alberto holds to purchase ten cups of coffee is an example of a transactions demand for money. This is because he needs to hold enough money to be able to make transactions for his weekly coffee purchases. The precautionary demand for money refers to holding money for unexpected expenses or emergencies, the asset demand for money refers to holding money as a store of value or investment, and the money balance demand for money refers to holding money based on personal preferences or habits.

Alberto Purchases Ten Cups of Coffee a Week