JAMB - Economics (2024 - No. 8)
Holding money to take care of contingencies is
a precautionary motive
a transactions motive
an expansionary motive
a speculative motive
Explicació
The precautionary motive refers to holding money as a precautionary measure to address uncertain future events or emergencies. It involves setting aside a portion of money for unexpected expenses, unforeseen circumstances, or contingencies that may arise. This motive emphasizes the need for a financial buffer to deal with unforeseen events and maintain financial stability.
NOTE: Precautionary motive for holding money varies direct with the level of income
NOTE: Precautionary motive for holding money varies direct with the level of income