The 3 motives for holding money are the transaction motive, the precautionary motive, and the speculative motive.
These are the transactions, precautionary and speculative reasons. these 3 motives represent the additives of the demand for money. it's far on those reasons that the level of demand for cash or liquidity
The principle explains people's motives to choose preserving coins instead of making an investment in hobby-bearing securities. The three motives explained by means of the version are transaction, precautionary and speculative reasons. desire depends.
The Liquidity preference idea says that the demand for money isn't to borrow money but the preference to remain liquid. In different phrases, the hobby fee is the 'charge' for cash. The Liquidity preference theory in to explain the position of the interest rate by means of the deliver and call for for cash.
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