The demand for money is

The demand for money refers to the amount of money that individuals and businesses are willing and able to hold at any given time. This demand is based on the need for money to make transactions or purchases, as well as for precautionary reasons such as savings for emergencies. It is called derived demand because it is derived from the demand for goods and services. As the level of income and economic activity increases, the demand for money also increases. Conversely, when income and economic activity decrease, the demand for money decreases.