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JAMB Economics 2013 Question 28

Question 28

Money and Inflation

If Mr. K obtains a N50,000 loan from a bank for the purpose of providing household needs, the demand for money is said to be

  1. A.transactionary and speculative.
  2. B.transactionary.
  3. C.speculative.
  4. D.precautionary and speculative.
Show the answer and explanation

Answer: B (transactionary.)

Explanation

Money wanted for everyday spending on household needs is held for the transactions motive.