. Transaction Motive
Peoples keep cash for the transaction motive. Everybody maintains cash balance to meet the daily transaction to pay to creditor, to buy goods and services, pay rent and to invest on business etc.
Speculative Motive
Some people hold money for the speculation purpose. Speculator always searches the project to invest money temporarily so that makes huge profit immediately. A speculator always maintains a cash balance to get the speculation benefits and outcomes.
Precautionary Motive
We all know that the future is always uncertain. So everybody hold money and maintain a cash balance for the future uncertainty. Increase of business or individuals, all’s future is really uncertain, so they keep cash to meet the future uncertainty risks to overcome.
So let's talk about motives for holding money. To understand the factors that determine Margie's demand for money, it helps to know the four main motives she might have for holding money at any given time.
Firstly, Margie often holds money in the form of cash or checking accounts in order to buy goods and services. Economists
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Let me explain further why I think it so. Liquid assets probably not in much favourable position in my household based on my partner's income, with him being the only sole provider at the moment. Aside from that, I also have the convenience of access across the border which is about less than half an hour journey to Johor Bahru in Malaysia where I could easily purchase most products for about a third cheaper than getting it locally,or even at 50 percent lesser , on days when the exchange rate is high. Technically, it would help to save quite a bit other than on some occasion that I could just simply exchange it for the rates thus the better spending power and as a form of