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Precautionary Demand

   Also found in: Wikipedia 0.01 sec.
Precautionary demand (for money)
The need to meet unexpected or extraordinary contingencies with a buffer stock of cash.

Precautionary Demand for Money
In Keynesian economics, a need for money resulting from an unforeseen situation. Medical bills following an accident are an example of precautionary demand. According to John Maynard Keynes, people keep savings accounts, as well as some stocks and commodities, in order to cover precautionary demand if and when it occurs.


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According to Greenpeace, the foundations of clean production are focused on five basic principles: a) The precautionary principle - adopted in Europe, the precautionary demand for diseases of workers and consumers, and irreparable damage to the planet.
Taking into account the strong precautionary demand for liquidity in the market, the HKMA operates within the convertibility zone, purchasing US dollars against HK dollars," she said.
Limited Access to International Financial Markets and the Precautionary Demand for International Reserves by Developing Countries One frequent by-product of financial opening has been financial crises.
 
 
 
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