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A consumer holds money to meet spending needs. This would be an example of option c) liquidity demand also known as transactions demand for money.
Transaction demand for money means money required for daily transactions or expenditures.
As a result, it can be claimed that a consumer has money on hand to cover their necessities. This would be an example of liquidity demand, also known as transaction demand for money.
The requirement for liquidity is driven by three elements: transactional, preventative, and speculative objectives. Cash is the most commonly used liquid asset, and more liquid investments may be promptly and easily withdrawn for their full worth, according to the theory.
To learn more about liquidity demand
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