Name and explain the three reasons for holding money balances.
What will be an ideal response?
One reason to hold money balances is to facilitate everyday market transactions. This is known as the transactions demand for money. Another reason is to handle unexpected market transactions such as emergencies, known as the precautionary demand for money. The third reason to hold money balances is for future financial opportunities, which are referred to as the speculative demand for money.
Economics
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One of the defining characteristics of a perfectly competitive market is what type of product ?
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