money quizlet

What Are The Two Reasons Why People Demand Money?

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What Are The Two Reasons Why People Demand Money? Transactions motive. The transactions motive for demanding money arises from the fact that most transactions involve an exchange of money. … Precautionary motive. People often demand money as a precaution against an uncertain future. … Speculative motive. Money, like other stores of value, is an asset.

Which Of The Source Of Money Is The Most Liquid?

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Which Of The Source Of Money Is The Most Liquid? M1 includes those assets that are the most liquid such as cash, checkable (demand) deposits, and traveler’s checks. M2 includes M1 plus some less liquid (but still fairly liquid) assets, including savings and time deposits, certificates of deposit, and money market funds. Which is the