needs to borrow money for short periods to meet some temporary crises
wish to hold more funds for precautionary purpose
need to increase the money supply in order to lower the interest rate
demand to hold money as assets rather than as stocks
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(in Keynesian theory) the preference of investors for holding liquid assets rather than securities or long-term interest-bearing investments.
"liquidity-preference theory"
Myschool.ng, please D is the correct option.
option D covers option B as well.
It entails the three motives for holding money
According to Keynes, the demand for liquidity is determined by three motives which are, transactional motives, PRECAUTIONARY MOTIVES and speculative motives.
HOPE THIS IS CLEAR NOW
D is correct... Liquidity precfernce is a Keynesian model in economics that profess the premium that wealth holders demand for exchanging ready money or bank deposits for safe, non-liquid assets such as government bonds.
