The act of holding money as insurance against cases of emergency gives rise to ______________ demand.

Transaction

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Speculative

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Precautionary

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Liquidity

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Solution

The correct option is C
Precautionary

The act of holding money as insurance against cases of emergency gives rise to precautionary demand.

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Similar questions

Explain speculative and transaction demands for money.

Speculative demand for money is given by $M_{s}^{d} =$

M_{s}^{d}

What is transaction demand for money? How is it related to the value of transactions over a specified period of time?

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