suppose you go shopping for a gift for a friend and also find a sweater that you want for yourself. you pay cash for the gift and write a check for the sweater. your purchases are made with money holdings represented by

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30-11-2022
Business

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suppose you go shopping for a gift for a friend and also find a sweater that you want for yourself. you pay cash for the gift and write a check for the sweater. your purchases are made with money holdings represented by

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Qwline Qwline · Answer 1 · 2022-12-03T14:37:49+01:00

Option b. the transaction demand for money because you planned to buy the gift and the precautionary demand for money because you did not anticipate buying the sweater is the correct answer.

Transaction demand for money is the requirement of money to fulfil day-to-day needs. It is one of the components of the money demand. It is a part of the income as whole money is not demanded transaction purposes.

Suppose you go shopping for a gift for a friend and also find a sweater that you want for yourself. You pay cash for the gift and write a check for the sweater. Your purchases are made with money holdings represented by

the transaction demand for money because you planned to buy the gift and the precautionary demand for money because you did not anticipate buying the sweater.

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