The precautionary motive for holding money is to enable the holder to
Answer Details
The precautionary motive for holding money refers to the reason why individuals or businesses hold money as a reserve for unforeseen contingencies. This means that people hold money as a precautionary measure to have a financial buffer or safety net in case of unexpected expenses, emergencies, or economic uncertainties. It is essentially a way of protecting oneself from financial risk by having access to liquid assets that can be easily converted into cash when needed.