What is the name of the type of demand for money that arises because a firm realizes that is has some expenditures that will be incurred in the near future?

Question

Quizplus · Accepted Answer

The demand for money that arises due to upcoming expenses and transactions is referred to as transaction demand. It includes expenditures related to day-to-day operations, such as paying salaries, buying raw materials, and paying suppliers. Therefore, option A is the correct answer. Precautionary demand refers to the demand for money as a precaution against unforeseen events, while short-term and long-term demand are based on the time period for which money is required.

What Is the Name of the Type of Demand for Money