Transaction Demand

See Transaction demand (for money.

---

Transaction Demand

The amount of money needed to cover the needs of an individual, firm, or nation. That is, transaction demand for money is a measure for how much of a certain currency people need in order to buy the goods and services they use. Typically, if an economy is healthy, there is a higher transaction demand because people are buying more goods and services. Conversely, if an economy is performing poorly, people buy fewer goods and services. Unless there is a significant, sudden change in the transaction demand, central banks have little difficulty adjusting the money supply to accommodate the changes that occur.