Precautionary motive
A desire to hold cash in order to be able to deal effectively with unexpected events that require cash outlay. |
Similar financial terms
Precautionary demand (for money)The need to meet unexpected or extraordinary contingencies with a buffer stock of cash.
Transactions motive
A desire to hold cash for the purpose of conducting cash based transactions.
Speculative motive
A desire to hold cash for the purpose of being in a position to exploit any attractive investment opportunity requiring a cash expenditure that might arise.
