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.