Question

The transaction motive relates to the desire of the people to hold cash for the future transactions.

• A. True
• B. False

Answer 1

The correct option is B False

False.

Transaction motive basically relates to the desire of the public to let the cash move freely in the economy through depositing it into the banks and initiating the process of credit creation in the economy. Transaction motive even relates to the motive of not influencing the price changes in the capital market.