___________ demand for money arises mainly due to the uncertainty of future receipts
and expenses.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Precautionary.
- Precautionary demand describes the demand for financial assets to be held against an unforeseen event.
- People often demand money as a precaution against an uncertain future.
- Unexpected expenses, such as medical or car repair bills, often require immediate payment.
- The need to have money available in such situations is referred to as the precautionary motive for demanding money.