Question 9
Money and InflationThe precautionary motive for holding money is to enable the holder to
- A.buy stocks when interests are high
- B.overcome unforeseen contingencies
- C.buy goods and services on daily basis
- D.buy fixed assets
Show the answer and explanation
Answer: B (overcome unforeseen contingencies)
Explanation
People keep money as a precaution against unexpected events such as illness or accidents.