Demands of money.

1. Transaction motive: The transaction motive is the desire to obtain liquidity to be able to conduct transactions.

2. Precautionary motive: The precautionary motive is the desire to obtain liquidity to guard against economic uncertainty, risk and danger.

3. Spectative motive: The speculative motive is the desire to obtain liquidity to be able to engage in speculative activities

Transaction motive

The transaction motive is a desire to exchange one's assets for cash or other assets. This can occur for a variety of reasons, such as paying off debt, making a large purchase, or purchasing an investment.

Precautionary motive

The precautionary motive occurs when an individual wants to protect his or her wealth from potential losses in the future. For example, if you are worried about losing your job and the possibility of losing your home to foreclosure, this would be considered a precautionary motive.

Speculative motive

The speculative motive occurs when an individual thinks that they will receive more money by holding onto their money rather than spending it. This is often referred to as hoarding or saving money.

The transaction motive is the most basic of the three motives. It is the need to have cash on hand to pay for regular expenses, and the liquidity performance theory states that this is the only motive that exists.

Precautious motive refers to the need to have liquidity in case of an emergency. While it may seem like a small thing, it's an important part of personal finance because it can help you avoid debt or bankruptcy if something unexpected happens.

Speculative motive refers to investing for long-term goals such as retirement or buying a house.

Transaction motive:

This is a person's desire to spend money as soon as possible. This can be caused by many factors, and the most common is when a person spends money to get rid of it. For example, if you have just received a large sum of money and you need to spend it on something, then you will want to spend it quickly because you will feel uncomfortable carrying around a large amount of cash. The transaction motive also applies when dealing with people who are in debt or who have financial problems; this is because they often want to spend money before it can be taken away from them.

Precautionary motive:

This is when someone spends money to protect their wealth from loss or harm by using it now rather than later (i.e., buying insurance). For example, if you knew that there was going to be an extremely bad storm coming your way tomorrow night, then you might decide today that it would be better for everyone involved if everyone went home early today instead of tomorrow morning. In this case, you could use some of your money today so that no one would have any left tomorrow morning after paying for food and drinks during tonight's party—this way no one

The three types of money demand are the transaction motive, precautionary motive and speculative motive.

The transaction motive is the desire to hold money for making purchases or payments. Because of this, it is often referred to as the utility of money.

The precautionary motive is the desire to hold money as a buffer against uncertainty. For example, if you receive your paycheck every week but need to make monthly payments on your car loan, you might want to hold some extra cash in case there are unexpected expenses.

The speculative motive is the desire to hold money for investment purposes. For example, if you believe that interest rates will rise in the future, you might want to invest some of your savings now so that it can earn interest when rates do rise later on.