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WAEC Economics 2011 Question 39

Question 39

Money and Inflation

The demand for money to take advantage of changes in bond prices is the

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

Answer: C (speculative motive.)

Explanation

Holding money to buy bonds when prices are favourable is the speculative motive.