Q.

The demand for money, according to Keynes, is for -

A. speculative motive
B. transaction motive
C. precautionary motive
D. All the above motives
Answer» C. precautionary motive
Explanation: According to Keynes, money is demanded because of three motives -transaction, precautionary and speculative. The first two motives provide yield of convenience and certainty. The third motive provides money yield. Keynes has termed demand for money as liquidity preference.
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