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WAEC Economics 2014 Question 47

Question 47

Money and Inflation

Precautionary motive for holding money is to

  1. A.meet daily and regular transactions.
  2. B.take advantage of changes in the prices of goods and services.
  3. C.cover unforeseen events.
  4. D.cover expenses on house rent.
Show the answer and explanation

Answer: C (cover unforeseen events.)

Explanation

Money held for emergencies and unexpected needs is the precautionary motive.