Author Question: There are several motives for holding assets in the form of money. What are they? Provide an example ... (Read 39 times)

beccaep · **on:** Jun 30, 2018

There are several motives for holding assets in the form of money. What are they? Provide an example of each.

Question 2

For most Third World countries, the key source of capital accumulation is _____.
a. internal debt
b. foreign direct investment
c. domestic business spending
d. domestic saving
e. foreign aid

Fayaz00962 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

There are three main reasons for holding money:
a . transaction purposes for facilitating exchange - groceries, utilities, clothing
b. precautionary purposes for unexpected expenses - medical emergencies; home repairs; auto repairs
c. asset purposes for easy conversion into goods and services (liquidity) - money market account balances to be used later for long-term investments

Answer to Question 2

b