Transactions demand for money, Microeconomics

Assignment Help:

Transactions demand for money:

Transactions demand for money represents cash balances held by economic agents in order to carry outordinary everyday transactions.For example, individual consumers need to hold money to buy food, cloth, pay bus fares, and so on. Similarly, business organizations need money to pay wages and electricity bills, buy raw materials, fuel for vehicles, etc.the transactions demand for money is directly related to income, and inversely related to the rate of interest that could be earned from holding interest-yielding assets in the alternative.

The precautionary motive, on the other hand, refers to holding cash balances as a precaution against unexpected events. For instance, people hold money to provide them with some degree of security against sudden illness, accidents, fire or flood disaster, and so on. The main factor influencing this motive is the level of income.


Related Discussions:- Transactions demand for money

Price, hi i need price,cross and income elasticity of toyota corolla car. ...

hi i need price,cross and income elasticity of toyota corolla car. its only small part of the assignment topic so its need around 500 words. thanks ishwor

Partial input elasticity of output, Partial Input Elasticity of Output:   ...

Partial Input Elasticity of Output:   This is a short-run concept which deals with the variability of only one factor keeping the others constant. There are three kinds of retu

Law of variable proportion, discuss the law of variable proportion with the...

discuss the law of variable proportion with the help of isoquants

Types of unemployment, Types of unemployment: Frictional Unemployment...

Types of unemployment: Frictional Unemployment: -It refers to unemployment caused by changes in individual labour markets.This is the type of unemployment resulting from peop

Name the five types of capital, Name the five types of capital. The fiv...

Name the five types of capital. The five types of capital are:  natural capital, manufactured capital, human capital, social capital and financial capital.

Macechj, according to Tobin 1993,examples of Keynesian unemployment include...

according to Tobin 1993,examples of Keynesian unemployment includes situation where

Elasticity of demand, elasticity of demand for demand function Q=10-2p for ...

elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

Market supply of labour, #queUse a graphical illustration to describe brief...

#queUse a graphical illustration to describe briefly what the influence of each of the following would be on the market supply of labor:(a) an increase in immigration (b) more wome

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd