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WAEC Economics 2025 Question 6

Question 6

Money and Inflation

A factor that positively influences the precautionary motive for holding money is

  1. A.convenient system of payment.
  2. B.high rate of interest.
  3. C.high degree of uncertainty.
  4. D.short interval between paydays.
Show the answer and explanation

Answer: C (high degree of uncertainty.)

Explanation

The more uncertain the future, the more money people keep for emergencies.