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WAEC Economics 2007 Question 27

Question 27

Money and Inflation

A certain amount of money is needed for everyday expenditure like buying of goods, transportation and others. This is

  1. A.transaction demand for money
  2. B.precautionary demand for money
  3. C.derived demand for money
  4. D.speculative demand for money.
Show the answer and explanation

Answer: A (transaction demand for money)

Explanation

Money held for day-to-day spending is the transactions demand for money.