Transactions motive

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Transactions motive

A desire to hold cash in order to conduct cash-based transactions.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Transactions Motive

The desire of an economic actor to maintain sufficient funds in a bank account in order to write checks on that account for daily needs and wants. A person with higher income has a greater transactions motive than a person with lower income; that is, that person wants to have more money in order to spend more. In Keynesian economics, the transactions motive is one of three reasons persons demand liquidity. See also: Liquidity preference, precautionary motive, speculative motive.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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