The demand for money to take advantage of changes in bond prices is the

Assessment: WAEC SSCE - Economics - 2011 (Objective) Subject: Economics

Question 1 Report

The demand for money to take advantage of changes in bond prices is the

Answer Details
The demand for money to take advantage of changes in bond prices is known as the speculative motive. This refers to the desire to hold money to take advantage of investment opportunities that may arise in the future. In this case, investors may want to purchase bonds when prices are low and then sell them when prices increase in the future. The speculative motive is one of the three motives for holding money, alongside the transaction motive (to facilitate daily transactions) and the precautionary motive (to provide a buffer against unexpected events).

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