Holding money to take care of contingencies is

  • A a speculative motive
  • B a transactions motive
  • C a precautionary motive
  • D an expansionary motive
jamb 2022economics

The correct answer is C. a precautionary motive

A precautionary motive is when people hold money to meet unforseen contingencies or circumstances e.g accident, sickness etc. It varies inversely with the level of income.

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