Which of the following was not suggested by John Maynard Keynes as a reason for holding cash?
Click on the arrows to vote for the correct answer
A. B. C. D.B
John Maynard Keynes was a British economist who is widely regarded as one of the most influential economists of the 20th century. He is best known for his theories on macroeconomics and his advocacy for government intervention in the economy. Keynes wrote extensively on the role of money in the economy, and he identified several reasons why individuals and businesses might want to hold cash.
The four motives for holding cash suggested by Keynes are as follows:
Transaction Motive: This refers to the need to hold cash for day-to-day transactions, such as paying for goods and services.
Precautionary Motive: This refers to the need to hold cash as a hedge against unexpected expenses or emergencies. Cash can provide a buffer against unforeseen events, such as a medical emergency or a job loss.
Speculative Motive: This refers to the desire to hold cash in anticipation of future opportunities to invest. By holding cash, individuals and businesses can take advantage of investment opportunities as they arise.
Portfolio Motive (also known as the Investment Motive): This refers to the desire to hold cash as a component of a diversified investment portfolio. Cash can serve as a hedge against market volatility and can help to balance out the risks of other investments in the portfolio.
Therefore, the answer to the question is B. Investment Motive, as it was actually suggested by John Maynard Keynes as one of the reasons for holding cash.