Holding money to take care of contingencies is
-
a precautionary motive
- a transactions motive
- an expansionary motive
- a speculative motive
The correct answer is: A
Explanation
The precautionary motive refers to holding money as a precautionary measure to address uncertain future events or emergencies. It involves setting aside a portion of money for unexpected expenses, unforeseen circumstances, or contingencies that may arise. This motive emphasizes the need for a financial buffer to deal with unforeseen events and maintain financial stability.
NOTE: Precautionary motive for holding money varies direct with the level of income