George makes $250 a week working as a student aid. When he cashes his check he takes $100 to the cashiers office to pay part of his tuition. $25 goes to paying off his books, $75 goes for entertainment and $50 he keeps for unexpected expenditures. Which of the following statements is TRUE?
A) The transactions demand for money is $125, the precautionary demand is $75 and the asset demand is $50.
B) The transactions demand for money is $0, the precautionary demand is $250 and the asset demand is $0.
C) The transactions demand for money is $250, the precautionary demand is $0 and the asset demand is $0.
D) The transactions demand for money is $200, the precautionary demand is $50 and the asset demand is $0.
Correct Answer:
Verified
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