Mataracy
VIP Contributor
It is true that every body need money. And money is generally describe as any thing that is acceptable as a medium of exchange.
So therefore Demand for money is a derived demand. This means that money is not wanted for its own sake,but rather it is needed in order to help satisfy certain objectives.
And the amount of money people may want to hold at a particular time depends on three motives. This are as follow:
TRANSACTION MOTIVE : This motive for holding money is derived from the desire to meet day-to-day transaction e.g need feeding ,clothing and other expenses.
PRECAUTION MOTIVE: People also hold money to meet expenditures which are not regular or planned.e.g Unexpected bills,such as ill-health or sudden death.
SPECULATIVE MOTIVE: This is money held to speculate on future events. It is the desire to benefit from price changes or money held for the purpose of avoiding capital loss in a security market.
By knowing all these as a business man/woman you will be able to know how to manage your money very well. You own idea is welcome.
So therefore Demand for money is a derived demand. This means that money is not wanted for its own sake,but rather it is needed in order to help satisfy certain objectives.
And the amount of money people may want to hold at a particular time depends on three motives. This are as follow:
TRANSACTION MOTIVE : This motive for holding money is derived from the desire to meet day-to-day transaction e.g need feeding ,clothing and other expenses.
PRECAUTION MOTIVE: People also hold money to meet expenditures which are not regular or planned.e.g Unexpected bills,such as ill-health or sudden death.
SPECULATIVE MOTIVE: This is money held to speculate on future events. It is the desire to benefit from price changes or money held for the purpose of avoiding capital loss in a security market.
By knowing all these as a business man/woman you will be able to know how to manage your money very well. You own idea is welcome.