Question 131990EconomicsWAEC

Which of the following are reasons for holding money instead of investing it? I. Transaction motive II. Precautionary motive III. Speculative motive IV. Liquidity motive

A

I and II only

B

I and III only

C

I, II and III only

D

I, II and IV only

Step-by-Step Explanation

Money is held for various motives, including the transaction motive, which facilitates everyday purchases, and the precautionary motive, which provides a buffer for unexpected expenses. The speculative motive involves holding money to take advantage of potential investment opportunities when they arise. While liquidity is important, it is not classified as a motive for holding money in the same way as the first three.

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