Essay
State whether the following illustrates the speculative,precautionary or transactions motive for holding money.
(a. )A bond broker holds cash for the possibility of buying a bond whose price is expected to rise.
(b. )John's mother tells him to keep $10 in his pocket any time he goes out in case he needs to put gas in the car.
(c. )Julio withdraws $100 from the bank to buy vegetables at the local organic farm market.
(d. )Mary takes out $50 from the bank to buy lunches during the week.
(c. )As stock prices begin to tumble,investors sell stock and increase their cash holdings.
Correct Answer:

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(a. )Speculative.
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Correct Answer:
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(b...
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