Which of the following is a motive for holding money?

A. celebration
B. daily purchases
C. election campaign
D. payment of taxes

Correct Answer:

Option B – daily purchases

Explanation

In his publication on The General Theory of Employment, Interest, & Money, Keynes outlined three reasons, or motives, for holding money or cash: Transaction Motive: to pay for goods or services. It is useful for conducting everyday transactions or purchases. Precautionary Motive: it’s a relatively safe investment.