Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a buffer stock of cash. |
Similar financial terms
Precautionary motiveA desire to hold cash in order to be able to deal effectively with unexpected events that require cash outlay.
Eurodollar demand deposit
Eurodollar demand deposit accounts are not often used or available, as the balances of such accounts would be volatile and the transaction costs incurred in such a service would reduce the overall efficiency and competitiveness of the eurodollar market. It is the latter factor that stimulates interest-rate-conscious corporate treasures and investment agencies to make eurodollar time deposits with banks in offshore centres.
Variable rated demand bond
Variable rated demand bond (VRDB) is a floating rate bond that can be sold back periodically to the issuer.
Transaction demand (for money)
The need to accommodate a firm's expected cash transactions.
Speculative demand (for money)
The need for cash to take advantage of investment opportunities that may arise.
Money market demand account
An account that pays interest based on short-term interest rates.
Demand, law of
Ceteris paribus, the lower the price of a good (or service), the greater the quantity of it that will be demanded by purchasers at any given time.
Demand curve
The deman curve is a graphic illustration depicting the relationship between quantity demanded and price when all other economic variables are held constant.
