Definition The stock of money people hold to take advantage of future changes in the prices of financial assets Precautionary demand for money/ Speculative demand for money/ Transactions demand for other than money The stock of money people hold to pay everyday predictable expenses The stock of money people hold to pay unpredictable expenses Motive money Precautionary demand for money/ Speculative demand for money/Transactions demand for money Precautionary demand for money/ Speculative demand for money/Transactions demand for money

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Match the correct motive for holding money to the following definitions.
Definition
The stock of money people hold to take advantage of future changes in the prices of financial assets Precautionary demand for money/ Speculative demand for money/ Transactions demand for
other than money
The stock of money people hold to pay everyday predictable expenses
The stock of money people hold to pay unpredictable expenses
As the interest rate rises, the opportunity cost of holding money
Identify the motive for holding money in the following scenario.
Motive
money
Precautionary demand for money/ Speculative demand for money/ Transactions demand for money
Complete the following statement about the relationship between the interest rate and speculative balances.
decrease/increase
falls/rises
Precautionary demand for money/ Speculative demand for money/Transactions demand for money
and people
their speculative balances.
Charles moves to a smaller apartment. Because of the lower monthly rent, he places a larger share of funds from his paycheck in a retirement
precautionary/speculative/transactions
fund and a smaller share in his savings account. This is an example of a decrease in Charles's
demand for money.
Transcribed Image Text:Match the correct motive for holding money to the following definitions. Definition The stock of money people hold to take advantage of future changes in the prices of financial assets Precautionary demand for money/ Speculative demand for money/ Transactions demand for other than money The stock of money people hold to pay everyday predictable expenses The stock of money people hold to pay unpredictable expenses As the interest rate rises, the opportunity cost of holding money Identify the motive for holding money in the following scenario. Motive money Precautionary demand for money/ Speculative demand for money/ Transactions demand for money Complete the following statement about the relationship between the interest rate and speculative balances. decrease/increase falls/rises Precautionary demand for money/ Speculative demand for money/Transactions demand for money and people their speculative balances. Charles moves to a smaller apartment. Because of the lower monthly rent, he places a larger share of funds from his paycheck in a retirement precautionary/speculative/transactions fund and a smaller share in his savings account. This is an example of a decrease in Charles's demand for money.
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