Transaction demand

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Transaction demand (for money)

The money needed to accommodate a firm's expected cash transactions.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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 of how much of a certain currency people need in order to buy the goods and services they use. Generally speaking, if an economy is healthy, there is a high transaction demand for money because people are buying more goods and services. Conversely, if an economy is in trouble, people buy fewer goods and services. Unless there is a significant, sudden change in the transaction demand, central banks have little trouble adjusting the money supply to accommodate the changes that do occur.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
An asset with these characteristics generates three demand components: transactions demand, precautionary demand, and speculative demand.
Moreover, transactions demand for money is determined by the full employment level of income.
But as fewer people are using cash for small transactions demand has been reduced.
The payment data and studies referred to in the last two sections point to the transactions demand for government base money now being in decline.
As we can see, liquidity exceeding the daily transactions demand, provides the non-profit organization with an option to take up unexpected projects worth realization to better realization of the mission [Washam 1989, Beck 1993].
Such inherently unique transactions demand the thorough evaluation of a tax professional well versed in international tax matters before they are undertaken.
(1952): "The transactions demand for cash: An inventory theoretic approach", The Quarterly Journal of Economics, Vol.
A third important development in the credit card market is an increase in the transactions demand for credit cards.
Banking deregulation in the 1980s and 1990s and financial innovation in the 1990s associated with the development of electronic payments indeed suggest we need to reconsider the measure of transactions demand for money.
This paper investigates the effects of opening and closing on transactions demand, volume, and volatility of options prices and their underlying assets.
"The Transactions Demand for Cash: An Inventory-Theoretic Approach," Quarterly Journal of Economics, vol.

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