Problem 18 John Maynard Keynes identified t... [FREE SOLUTION]

Chapter 13: Problem 18

John Maynard Keynes identified three motives for holding money. Which motive listed below did Keynes not identify? (L.O4) a) Transactions b) Precautionary c) Psychological d) Speculative

Short Answer

Expert verified

The correct answer is (c) Psychological, as it is not one of the motives for holding money mentioned by John Maynard Keynes.

Step by step solution

List the three motives for holding money identified by Keynes

John Maynard Keynes identified three motives for holding money. They are: 1. Transactions motive 2. Precautionary motive 3. Speculative motive

Go through the given options and compare them with Keynes' list

Now we'll go through each of the given options and compare them to the motives identified by Keynes: a) Transactions: This is one of the motives identified by Keynes (the transactions motive). So this is not the correct answer. b) Precautionary: This is also one of the motives identified by Keynes (the precautionary motive). So this is not the correct answer either. c) Psychological: This is not one of the motives identified by Keynes. It might be an answer, but let's check the last option to be sure. d) Speculative: This is one of the motives identified by Keynes (the speculative motive). So this is not the correct answer.

Identify the correct answer

Since we have verified that options (a), (b), and (d) are motives identified by Keynes, the correct answer is (c) Psychological, as it is not one of the motives for holding money mentioned by John Maynard Keynes.