Holding money as a medium of exchange to purchase goods and services and make payments is known as the

Question

Quizplus · Accepted Answer

The transactions demand for money refers to holding money as a medium of exchange for everyday transactions, such as purchasing goods and services and making payments. Option A, spending demand for money, is not a commonly used economic term. Option C, precautionary demand for money, refers to holding money as a precautionary measure against unexpected expenses or income fluctuations. Option D, asset demand for money, refers to holding money as a store of value, such as a savings account or investment.

Holding Money as a Medium of Exchange to Purchase Goods