The speculative demand for holding money is when people hold money: Group of answer choices

a: to take advantage of changes in interest rates.

b: as insurance against unexpected needs.

c: to transact purchases they expect to make.

d: to speculate in the stock market.

e: instead of near money.

a: to take advantage of changes in interest rates.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.

According to John Maynard Keynes, the three (3) desires governing the need for money are;

I. Transactions demand.

II. Precautionary demand.

III. Speculative demand.

In Keynesian economics, speculative demand for money can be defined as a desire or need to hold money for the sole purpose of investing it in assets other than those necessary for living.

This ultimately implies that, the speculative demand for holding money is when people hold money to take advantage of changes in interest rates while waiting for better market conditions.

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