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MOTIVES FOR HOLDING MONEY  — Economics Keypoint

MOTIVES FOR HOLDING MONEY 

TRANSACTIONARY MOTIVE – Money is held for the desire to meet daily expenses such as purchase of food and cloths.

PRECAUTIONARY MOTIVE: Money is held for the desire to meet up with emergency situation or unforeseen circumstances like illness or death

SPECULATIVE MOTIVE – Money is held for fear of future rise or fall in prices of goods.

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